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 388K jobs in February as against the loss of 301K jobs in the previous month. The report might influence expectations from the official Nonfarm Payrolls (NFP) report and help predict how things could move on Friday.
How could it affect EUR/USD?
Ahead of the key release, a goodish recovery in the risk sentiment forced the safe-have US dollar to trim a part of its early gains to the highest level since June 2020. Apart from this, stronger than expected Eurozone CPI print extended some support to the shared currency and assisted the EUR/USD pair to gain some positive traction on Wednesday. That said, the optimistic move in the markets runs the risk of fizzling out rather quickly amid worries about the worsening situation in Ukraine. This should continue to act as a tailwind for the buck and keep a lid on any meaningful upside for the major, suggesting that the immediate reaction to the US ADP report is more likely to be short-lived.
Meanwhile, Eren Sengezer, Editor at FXStreet, outlined important technical levels to trade the pair: “EUR/USD seems to have met interim support at 1.1080 and the pair could face renewed bearish pressure if buyers fail to defend this level. On the downside, 1.1000 (psychological level) could be seen as the next support.”
“In the meantime, the Relative Strength Index (RSI) indicator on the four-hour chart is still below 30, suggesting that the pair could push lower before turning technically oversold. Resistances are located at 1.1150 (static level), 1.1180 (20-period SMA) and 1.1220 (static level),” Eren added further.
Key Notes
• US ADP February Preview: Private job creation returns
• EUR/USD Forecast: Euro bears eye 1.1000 as Russian aggression continues
• EUR/USD to drop towards 1.10 unless heartening news of a ceasefire in Ukraine – ING
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.
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