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 13:15 GMT. Consensus estimates suggest that the US private-sector employers added 525K jobs in November, down from 571K in the previous month. Despite poor correlation with the official Nonfarm Payrolls (NFP) figures, the report would help predict how things could move on Friday.

How could it affect EUR/USD?

Given Fed Chair Jerome Powell's overnight hawkish comments, a stronger reading will further validate market bets for a more aggressive policy tightening by the US central bank. This, in turn, should be enough to prompt fresh US dollar buying and turn the EUR/USD pair vulnerable.

Conversely, a softer print would add to worries about the potential economic fallout from the new Omicron variant of the coronavirus. This might continue to weigh on investors' sentiment and benefit the greenback's relative safe-haven status, suggesting that the path of least resistance for the EUR/USD pair is to the downside.

Meanwhile, Eren Sengezer, Editor at FXStreet, offered a brief technical outlook for the EUR/USD pair: “On the four-hour chart, the Relative Strength Index (RSI) indicator has returned to 60 after edging lower to 50, suggesting that sellers remain on the sidelines for the time being.”

Eren also outlined important technical levels to trade the major: “However, strong resistance seems to have formed around 1.1360, where the Fibonacci 38.2% retracement of November's downtrend meets the 100-period SMA. In case buyers manage to flip that level into support, additional gains toward 1.1400 (Fibonacci 50% retracement) and 1.1450 (Fibonacci 61.8% retracement) could be witnessed.”

“On the other hand, 1.1300/1.1290 (psychological level, Fibonacci 23.6% retracement, 20-period SMA) aligns as initial support before 1.1260 (50-period SMA) and 1.1235 (Tuesday low),” Eren added further.

Key Notes

  •  ADP Jobs Preview: Dollar rally? Why the greenback is set to rise on (almost) any figure

  •  EUR/USD Forecast: Euro needs to claim 1.1360 to extend recovery

  •  EUR/USD comes under pressure, still above 1.1300

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.