The ADP report on private-sector employment will be released at 12:15 GMT on Wednesday, according to the US economic calendar. Economists anticipate another robust report, with 600,000 new jobs added by private-sector firms in June. This would be a significant drop from the previous month’s record-breaking amount of nearly one million.
According to FXStreet’s own analyst, Yohay Elam, “The ADP Nonfarm Payrolls data gives a picture of private-sector hiring and serves as a leading indicator for the official Bureau of Labor Statistics Nonfarm Payrolls report. The early release on Wednesday helps to set the tone for Friday.”
The positive outlook for the US economy and labor market will be bolstered by a stronger-than-expected reading. This might encourage speculation about the Fed tightening monetary policy sooner rather than later, giving a lift to the already strong US dollar. In contrast, a market reaction to a weaker reading is more likely to be modest, as investors prefer to wait for the official employment report (NFP) to be released on Friday. As a result, the EUR/USD pair’s path of least resistance appears to be to the negative.
Meanwhile, Yohay Elam provided a quick technical assessment of the major: “On the four-hour chart, the euro/dollar has failed to reclaim the 50 Simple Moving Average and is being pulled lower by downside momentum, despite the Relative Strength Index (RSI) being far from oversold. Bears, on the whole, have the upper hand.”
Yohay also provided key technical levels for trading the EUR/USD pair: “The daily low of 1.1885, as well as 1.1850, which was a low point in mid-June, provide some support. The next levels to watch are 1.18 and 1.1760, which are further down. Looking up, 1.1920, a support line from last week, offers some resistance, followed by the late-June peak of 1.1975. Only around 1.2050 does a major cap appear above 1.20.”
o ADP (Asset Development Program) Payrolls from Non-Farm Employment Preview: Going against the grain? What is the best way to trade this leading indicator?
o USD/EUR Forecast: The dollar’s rise threatens to drive the EUR/USD pair below 1.1850. Analysis of Costs: Bears must evaluate the M-formation on a daily basis.
The Automatic Data Processing, Inc, Inc Employment Change is a measure of the change in the number of people employed in the United States. A rise in this statistic, in general, has good implications for consumer expenditure, hence supporting economic growth. As a result, a high reading for the USD is traditionally regarded as positive, or bullish, while a low value is regarded as negative, or bearish.
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