When is the US ADP employment report (NFP) and how could it affect EUR/USD?

US ADP jobs report overview

Wednesday's US economic docket features the release of the ADP report on private-sector employment, due at 12:15 GMT. Estimates point to an addition of 200K private-sector jobs in November, down from 239K in the previous month. The data could drive expectations for the official jobs report, popularly known as NFP scheduled for release on Friday.

How could the data affect EUR/USD?

Any positive number would reaffirm the robust US labour market and lifts bets for further policy tightening by the Fed. As Yohay Elam, Senior Analyst at FXStreet explains: “The Federal Reserve and markets want to see the labor market cool down after the reopening-driven boom, which caused substantial shortages. There are still two jobs for each vacant worker. While the pace of hiring has slowed in recent months, there is still a long way to go.” 

Hence, a stronger-than-expected report could lend some support to the US Dollar and attract fresh selling around the EUR/USD pair. Conversely, any disappointment will add to worries about a deeper economic downturn and weigh on investors' sentiment, which, in turn, should act as a tailwind for the safe-haven buck. That said, the immediate market reaction is more likely to remain limited as the focus remains glued to Fed Chair Jerome Powell's speech later during the US session.

Meanwhile, Eren Sengezer, Editor at FXStreet, offers a brief technical overview of the pair and writes: “EUR/USD is fluctuating below the 20-period Simple Moving Average (SMA) on the four-hour chart but struggling to pull away from the 50-period SMA, reflecting the pair's indecisiveness. Additionally, the Relative Strength Index is flat near 50.”

Eren also outlines important technical levels to trade the EUR/USD pair: “On the upside, 1.0390/1.0400 (20-period SMA, psychological level) aligns as first resistance area. In case the pair clears that hurdle and starts using it as support, it could target 1.0470 (static level) and 1.0500 (psychological level, multi-month high set on Monday).”

“The 100-period SMA and the Fibonacci 23.6% retracement of the latest uptrend form critical support at 1.0300. A four-hour close below that level could attract sellers and open the door for an extended slide toward 1.0200 (Fibonacci 38.2% retracement),” Eren adds further.

Key Notes

  •  ADP Jobs Preview: Markets set to find more reasons to sell the Dollar, big beat needed to boost it

  •  EUR/USD Forecast: Euro eyes highly volatile session

  •  EUR/USD climbs to daily highs near 1.0380, focus remains on data, Powell

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.