EUR/USD fluctuates around 0.9860 ahead of the FOMC's monetary policy decision

• EUR/USD is almost unchanged after hitting a daily high of 0.9915.
• The October US ADP Employment Change report gives another reason for the Fed to continue its “aggressive” approach to monetary policy.
• Eurozone’s S&P Global Manufacturing PMI Final for October confirms that the bloc might get a recession.

The EUR/USD is subdued ahead of the Federal Reserve Open Market Committee (FOMC) decision, which is utmost sure it will deliver the fourth 75 bps rate hike by the Fed, though what traders are looking for the pace of further increases if it would keep the pace, or slow it down, as sources linked to the Fed said in an article on October. At the time of writing, the EUR/USD is trading at 0.9867, almost unchanged.

The EUR/USD is range-bound ahead of the Fed’s decision

US equities continue to trade with minimal losses following the release of US jobs data, reflecting that the labor market is yet to ease. At the same time, the Fed pivot narrative would be confirmed or pushed back once Jerome Powell hit the stand.

ADP reported that the US companies hired more people than estimated in October. The ADP Employment Change report for October showed that private payrolls jumped by 239K above estimates of 185K and crushed the September upward revision of 192K.

According to Nela Richardson, ADP’s Chief Economist, the report is strong given the maturity of the economic normalization, though she noted that hiring was not broad-based. She added, “Goods producers, which are sensitive to interest rates, are pulling back, and job changers are commanding smaller pay gains.”

Given that the US economy is back in expansionary territory, the October Core Personal Consumption Expenditures (PCE), the Fed’s favorite gauge of inflation, increased, the ISM Manufacturing PMI remains in expansionary territory, and US jobs data flashing the tightness of the labor market, that could deter the Federal Reserve from slowing the pace of tightening.

Aside from this, the Eurozone calendar featured the Germany Balance of Trades which showed a surplus of €9 billion in September vs. €0.3 billion in August. Later, the S&P Global Manufacturing PMI on its final reading, plunged to 46.4, below estimates of 46.6, reinforcing the case that the Eurozone might get into a recession.

Ahead in the calendar, at 18:00 GMT, the Federal Reserve will reveal its monetary policy decision, followed by Jerome Powell’s press conference at 18:30 GMT.

EUR/USD Key Technical Levels