On Friday, March's non-farm payrolls came out. The good news is that it clocked in a 244,000 net increase in the number of jobs, which was significantly bigger than the 185,000 figure the market initially expected. It was also better than the 211,000 gain seen the previous month.

Unfortunately, the jobless rate did not share the same optimistic tune. According to the employment report, joblessness in the U.S. disappointingly climbed to 9.0% from 8.8% as job creation could not keep up with the number of people entering the workforce.

Average hourly wages also an upset as it only showed a 0.1% growth, and not 0.2% as expected. It looks as if the employment conga line is getting longer and longer!

Other reports related to the U.S. labor market didn't look too well either. The ADP's version showed only a rise of 179,000, a slower pace of growth than in March. For the week ending April 23, unemployment claims also jumped to 474,000 from the previous week's 431,000.

Effect on EUR/USD

Now let's take a look at how the NFP report affected price action in the forex market. But to make things a little more exciting this time, we'll put it side by side with the past NFP reactions and see if we can spot some differences. This should be interesting...

As you probably noticed from the table above, the NFP results for the past three months came in better than expected.

For the February and March results, EUR/USD reacted positively to the upbeat U.S. labor market figures yet the price action following the April report was the exact opposite. In fact, the NFP figure for April printed the biggest upside surprise yet EUR/USD suffered its worst drop.

What's different this time around?

After rummaging through my past Piponomics articles, I remembered that the market's mood was very much different during the release of the February and March NFP figures.

At that time, traders were counting on an interest rate hike from the European Central Bank (ECB), which was probably why upbeat economic data just whet their appetite for higher-yielding currencies.

This time around, the euro seems to have lost its appeal. For one thing, news that Greece may leave the euro zone made the U.S. dollar look more stable than the euro.

Aside from that, euro bulls had to take their much needed break after the overextended euro rallies. Euro traders were probably waiting to close their long positions and the NFP release became a catalyst for profit-taking.

Looking forward, it seems that the U.S. labor market could continue to see more improvements but, as always, it's tough to tell how the currencies will react.

If you haven't dozed off in the past couple of paragraphs, you'd realize that market sentiment plays a crucial role in determining price action during the NFP release. That's why I always remind you to read Pip Diddy's daily economic roundup, drink your milk, and eat your vegetables!