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US Dollar at the Mercy of Economic Data, ADP Jobs Report in View

US Dollar at the Mercy of Economic Data, ADP Jobs Report in View

Ilya Spivak, Head Strategist, APAC


  • US Dollar little-changed since last week’s Fed-inspired selloff
  • ADP jobs data eyed as preview of Friday’s official NFP release
  • EUR/USD struggling to make good on bullish Wedge breakout
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The US Dollar has been little-changed on net since slipping in the wake of last week’s FOMC policy announcement, seemingly underscoring that move’s limited scope for follow-through. This is because the central bank’s cautious inching toward tapering QE was on-boarded as ‘dovish’ by investors that just recently balked at the idea of even considering conversation about stimulus withdrawal.

This probably signals to Fed officials that their “forward guidance” campaign is succeeding. The markets have seemingly acclimated to the inevitability of tightening, and even to its gradual onset in the foreseeable term. Chair Powell and company may now have room to escalate again, with the annual Jackson Hole symposium mere weeks away. The gathering is frequently a venue for previewing big policy changes.

The tone of incoming economic data now seems critical. If Fed is to convince markets to come along peacefully as it plants the seeds of normalization, investors will need to be reassured that the economy can stomach it. With the Delta variant of Covid-19 triggering at least some slowing of reopening global efforts – from tightened masking rules in some places to full-scale lockdowns in others – the threat to growth is palpable.

The highest-profile piece of data steering this narrative on this week’s calendar is surely Friday’s official US employment report. Today’s docket offers a bit of a preview with the private-sector estimate of jobs growth from ADP. It is expected to show that job creation in July will add 695k to payrolls, nearly matching June’s 692k rise. If hiring outpaces forecasts – as telegraphed in ISM survey data – the Greenback may rise.

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The Euro is struggling to make lasting headway against the US Dollar after bouncing from 10-month chart support to break the bounds of a bullish Felling Wedge pattern. Prices are idling in the 1.1836-95 congestion area. A break upward eyes further resistance close by in the 1.1952-90 region. Taking out near-term support with a daily close below 1.1750 exposes the 1.17 figure on route to the key 1.1600-30 zone.

EUR/USD daily chart created with TradingView


--- Written by Ilya Spivak, Head Strategist, APAC at

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter

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