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 12:15 GMT. A recovery in the labour market is one indicator being used by the Fed to decide when it would tighten monetary policy. Hence, the report will play a key role in influencing market expectations about the likely timing of the Fed's tapering plan. Following a big miss over the past two months, economists expect that hiring accelerated to 428K in September from 374K in August.

How could it affect EUR/USD?

Ahead of the key release, the US dollar jumped back closer to one year tops and dragged the EUR/USD pair to the lowest level since July 2020. A stronger print will reaffirm speculations for an early policy tightening by the Fed and provide an additional boost to the greenback. Conversely, a weaker reading is likely to be overshadowed by the risk-off impulse in the markets, which should continue to act as a tailwind for the USD amid rising US Treasury bond yields.

This, in turn, suggests that the path of least resistance for the pair remains to the downside. That said, the immediate reaction is likely to be short-lived as investors might wait for a confirmation from Friday's official data (NFP) before placing fresh directional bets.

Meanwhile, Yohay Elam, FXStreet's own Analyst offered a brief technical outlook for the EUR/USD pair: “Euro/dollar has resumed its decline and remains capped by the 50, 100 and 200 Simple Moving Averages (SMAs) on the four-hour chart. On the other hand, momentum remains positive. Bears need the price to drop below the 2021 trough of 1.1562 to trigger a more forceful fall.”

Yohay also provided important technical levels to trade the major: “Below 1.1562, the next level to watch is the round 1.15 line, followed by 1.1450. Some resistance awaits at 1.1590, which provided support on Tuesday. It is followed by 1.1615, which capped the pair on Tuesday, and then by 1.1640.”

Key Notes

  •  US ADP Employment Change September Preview: Yes, it's all about the Fed

  •  EUR/USD Forecast: Euro set to tumble to new yearly lows as King Dollar has all stars aligned

  •  EUR/USD set to plunge towards the 1.1395 level – Commerzbank

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.