ADP In Focus Today
Ahead of Friday’s headline US employment data (NFP, average earnings, unemployment rate), today’s ADP employment change number will be closely watched. The market is looking for 196k, down from 239k prior. A reading in this area or below will likely be seen as raising the chances of a similar downward print at Friday’s NFP. In this scenario, USD is likely to come under pressure with weaker jobs growth endorsing the prospect of a smaller hike from the Fed in December. On the other hand, if today’s reading surprises to the upside, USD is likely to rally into Friday’s data with traders eyeing the prospect of a similar upside surprise at the NFP, keeping a larger hike on the table in December.
Keep An Eye On JOLTS Too
Alongside the NFP, we also have the latest JOLTS job openings data. The market is looking for this data to have cooled to 10.2 million from 10.7 million previous. If this projection is confirmed, in line with a weaker ADP reading, this should add to the case for USD bearishness. Any upside surprise, however, will reinforce the Fed’s view that the labour market is still too tight, keeping inflationary pressures alive in the US economy.
Technical Views
DXY
The reversal lower in the Dollar Index from highs around 151.81 has seen the market breaking down through support at 145 and through the bull channel lows. Price is currently testing support at the 139.33 level and looks vulnerable to a further break lower with 131.36 the next downside level to note. We are seeing bullish divergence on momentum readings here however, meaning a further push higher cannot be ruled out.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.