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 400K jobs in December, marking a clear slowdown from the 534K reported 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.

Joseph Trevisani, Senior Analyst at FXStreet, offered his take on the report and explained: American firms closed out the year with moderate hiring despite rampant pandemic cases in parts of the country, an unsettled economy and a newly assertive Federal Reserve.

How could it affect EUR/USD?

Ahead of the key release, retreating US Treasury bond yields exerted some downward pressure on the US dollar and assisted the EUR/USD pair to attract fresh buying near the 1.1275-70 area on Wednesday. That said, a stronger reading would validate bets for a more aggressive policy tightening by the Fed and lift the buck.

Conversely, a softer print might do little to influence the greenback ahead of the latest FOMC meeting minutes, due later during the US session. Moreover, investors might also wait for a confirmation from the official report. This, in turn, suggests that the market would react little to the data, albeit any significant divergence from the expected reading might still provide some impetus.

Meanwhile, Eren Sengezer, Editor at FXStreet, outlined important technical levels to trade the EUR/USD pair: “As of writing, EUR/USD was trading near the 200-period and 100-period SMAs on the four-hour chart, which have been moving sideways near 1.1300 since the beginning of the week. On the upside, 1.1320 (20-period SMA, 50-period SMA, broken ascending trend line) aligns as the first technical hurdle before 1.1340 (static level) and 1.1360 (post-ECB high, static level).”

“Initial static support is located at 1.1270. With a daily close below that level, EUR/USD could target 1.1240 (static level) on the downside before testing 1.1200 (psychological level),” Eren added further.

Key Notes

  •  US ADP December Preview: Suddenly its inflation, not jobs

  •  EUR/USD Forecast: Euro unlikely to stage a convincing rebound ahead of US events

  •  EUR/USD to break to a new low in the first half of the year – 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.