US ADP jobs report overview
Wednesday's US economic docket features the release of the ADP report on private-sector employment for April, due at 12:15 GMT. Estimates point to an addition of 148K private-sector jobs during the reported month as compared to the 145K in March. The data will provide fresh insight into the US labor market conditions and drive expectations for the official jobs report, popularly known as NFP scheduled for release on Friday.
According to Matías Salord, news Reporter at FXStreet: “A slowdown in the job market is expected as the impact of tighter monetary policy hits the economy. It won’t necessarily be bad news for the Fed. A tight labor market is not helpful in fighting inflation. The market’s reaction to ADP has been trending lower over the years. The response could be short-lived but is still a relevant macroeconomic report about a crucial market.”
How could the data affect EUR/USD?
Ahead of the US labor market data, the US Dollar (USD) is seen extending the overnight retracement slide from a three-week top amid concerns over the US debt ceiling and renewed fears of a full-blown banking crisis. The disappointing release of the ADP report will reaffirm market bets that the Fed will eventually pause its rate-hiking cycle sooner rather than later. This, in turn, would prompt fresh USD selling and allow the EUR/USD pair to build on its ongoing recovery momentum from over a one-week low touched on Tuesday.
Conversely, a stronger reading is unlikely to impress the USD bulls ahead of the official jobs report on Friday. Traders might also refrain from placing aggressive bets and prefer to wait on the sidelines heading into the key event risk - the highly-anticipated FOMC monetary policy decision, due later during the US session. This, in turn, suggests that the immediate market reaction to a positive surprise is more likely to be muted.
Eren Sengezer, Editor at FXStreet, offers a brief technical outlook for the major and writes: “EUR/USD returned within the long-term ascending regression channel and closed the last four-hour candles above the 20-period and the 50-period Simple Moving Averages (SMA) on the four-hour chart, reflecting a buildup of bullish momentum. Additionally, the Relative Strength Index (RSI) indicator on the same chart is back above 50 after having spent the last couple of trading days below that level.”
Eren also outlines important technical levels to trade the EUR/USD pair: “On the upside, 1.1050 (static level) aligns as interim resistance ahead of 1.1070 (end-point of the uptrend, mid-point of the ascending channel) and 1.1100 (psychological level, static level).”
“1.1000/1.0990 (psychological level, 100-period SMA) could be seen as the first support. A four-hour close below that area could discourage buyers and open the door for additional losses toward 1.0950 (Fibonacci 23.6% retracement) and 1.0920 (200-period SMA),” Eren adds further.
Key Notes
• US ADP Jobs/ISM Service PMI Preview: Slowing but still positive
• EUR/USD Forecast: Euro bulls retain control as focus shifts to Fed
• EUR/USD climbs to weekly highs past 1.1040, focus remains on Fed
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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD holds above 0.6500 in thin trading
The Australian Dollar managed to recover ground against its American rival after AUD/USD fell to 0.6484. The upbeat tone of Wall Street underpinned the Aussie despite broad US Dollar strength and tepid Australian data.
EUR/USD comfortable below 1.0800 lower lows at sight
The EUR/USD pair lost ground on Thursday and settled near a fresh March low of 1.0774. Strong US data and hawkish Fed speakers comments lead the way ahead of the release of the US PCE Price Index on Friday.
Gold pulls away from daily highs, holds above $2,200
Gold retreats from daily highs but holds comfortably above $2,200 in the American session on Thursday. The benchmark 10-year US Treasury bond yield stays near 4.2% after upbeat US data and makes it difficult for XAU/USD to gather further bullish momentum.
Google starts indexing Bitcoin addresses
Bitcoin address data is live on Google search results after users realized on Thursday that the tech giant started indexing Bitcoin blockchain data. However, mixed reactions have followed the tech giant's reversed stance on the cryptocurrency.
A Hollywood ending for fourth quarter GDP
The latest revisions put Q4 GDP at 3.4%, the second fastest quarterly growth rate in two years. Much of the upside was attributable to stronger consumer spending, yet fresh profits data affirmed it was a good quarter for the bottom line as well with profits up by the most since the Q2-2022.