When is the US ADP jobs report and how could it affect EUR/USD?

US ADP jobs report overview

Wednesday's US economic docket highlights the release of the ADP report on private-sector employment, scheduled at 12:15 GMT. Economists expect another strong report, indicating that private-sector employers added nearly 700K new jobs for the second successive month in July.

Eren Sengezer, Editor at FXStreet, offered his view on the report and explained: “Considering how the service sector employment made up the majority of job gains in June, an increase in manufacturing jobs might not be able to offset a decline in service sector jobs and cause the ADP Employment Change to post a lower-than-expected print.”

How could the data affect EUR/USD?

Ahead of the key release, the EUR/USD pair dropped to multi-day lows, though a subdued US dollar price action helped limit the downside. A disappointing report might be enough to prompt some selling around the USD. Conversely, a stronger-than-expected print is more likely to be overshadowed by firming expectations that the Fed will wait for a longer period before slowing its massive monetary support. This, in turn, suggests that the path of least resistance for the US is down, which should assist the pair to regain some positive traction. That said, any immediate market reaction should be limited as the focus remains on Friday's release of the closely-watched US monthly jobs report – popularly known as NFP.

Yohay Elam, FXStreet's own analyst, offered a brief technical outlook for the major: “Momentum on the four-hour chart turned to the downside, a bearish sign. On the other hand, EUR/USD is holding above the 200 Simple Moving Average, which converges with the 1.1850 level – a resistance line from mid-July. That is the critical support line.”

Yohay also offered important technical levels to trade the EUR/USD pair: “Below 1.1850, the next cushion is at 1.1830, which was a swing high in late July. It is followed by 1.1770 and 1.1750 – the latter being last month's low. Euro/dollar resistance is at 1.1910, the July high, followed by 1.1945, 1.1975 and 1.2015.”

Key Notes

  •  US ADP Employment Change July Preview: Jobs gains in service sector to slowdown

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  •  EUR/USD Price Analysis: Something for everyone

About the US ADP jobs report

The Employment Change released by the Automatic Data Processing, Inc, Inc is a measure of the change in the number of employed people in the US. Generally speaking, a rise in this indicator has positive implications for consumer spending, stimulating economic growth. So a high reading is traditionally seen as positive, or bullish for the USD, while a low reading is seen as negative, or bearish.