Since the end of last week, the US Dollar has been advancing across the board. It particularly popped at the beginning of this week on the back of better than expected economic releases and on hopes of a possible rate hike by the Federal Reserve later this year. Yet, nothing has been confirmed, and the upcoming economic releases remain key for the Federal Reserve’s decision and the market’s movement. Today, all eyes turn to a collection of economic releases, including ADP Non-Farm Employment Change, Trade Balance, Factory Orders and the ISM Non-Manufacturing PMI, which are likely to have a notable impact on the market.
Definition
ADP Non-Farm Employment Change: the ADP provides an estimated change in the number of employed people during a given month, excluding the farming industry and the government. In short, this index measures the private sector’s employment conditions.
Why This is Important
This data provides an early look at employment growth; it is usually published two days before the major US jobs report – a positive Non-Farm Employment Change suggests then the NFP might also come in with a positive outcome and vise verse.
Market Impact
Generally speaking, better than expected data should be positive for the US Dollar, because traders will likely price in a better NFP before the real announcement on Friday. On the other hand, a notable decline in the US Dollar across the board might be seen if figures show a slowdown in private sector employment.
What Matters In Today’s Data
Since the beginning of the year, employment conditions in the US have been slowing down. This is also apparent in ADP numbers. Last year, the Average ADP was around 200K new jobs throughout the year. However, in 2016, the average dropped below 170K, while the weakest reading was in April when ADP printed 156K new jobs only. In today’s data, traders need to keep an eye on the average of the year. The further slowdown might not help the US Dollar in sustaining its recent gains.
Anything Else To Watch For
Yes, it is not only the ADP Non-Farm figure today. We always recommend that traders watch the rest of the data, including the trade balance and factory orders, but most importantly, traders should keep an eye on the ISM Non-Manufacturing PMI, which also includes another employment component.
Levels To Watch
| Symbol |
S3 |
S2 |
S1 |
Pivot |
R1 |
R2 |
R3 |
| EURUSD |
1.1041 |
1.1088 |
1.1146 |
1.1193 |
1.1251 |
1.1298 |
1.1356 |
| GBPUSD |
1.2527 |
1.2621 |
1.2674 |
1.2768 |
1.2821 |
1.2915 |
1.2968 |
| USDJPY |
100.54 |
101.04 | 101.97 | 102.47 | 103.40 | 103.90 |
104.83 |
| USDCHF |
0.9612 |
0.9666 | 0.9728 | 0.9782 | 0.9844 | 0.9898 |
0.9960 |
| AUDUSD |
0.7496 |
0.7550 | 0.7585 | 0.7639 | 0.7674 | 0.7728 |
0.7763 |
| NZDUSD |
0.7045 |
0.7119 | 0.7164 | 0.7238 | 0.7283 | 0.7357 |
0.7402 |
| USDCAD |
1.3018 |
1.3062 | 1.3128 | 1.3172 | 1.3238 | 1.3282 |
1.3348 |
| GBPJPY |
129.20 |
129.72 | 130.34 | 130.86 | 131.48 | 132.00 |
132.62 |
| EURJPY |
112.64 |
113.22 | 114.26 | 114.84 | 115.88 | 116.46 |
117.50 |
| EURGBP |
0.8624 |
0.8664 | 0.8734 | 0.8774 | 0.8844 | 0.8884 |
0.8954 |
| Gold |
1207.76 |
1237.03 | 1251.66 | 1280.93 | 1295.56 | 1324.83 |
1339.46 |
| Silver |
16.171 |
16.958 | 17.366 | 18.153 | 18.561 | 19.348 |
19.756 |
