EURUSD, H1
The 177k ADP rise in June undershot 195k private BLS payroll estimate with a 200k total BLS nonfarm payroll increase, following an 11k boost in the May ADP rise to 189k from 178k that narrowed the gap to the 218k private payroll increase reported for that month. We saw a restrained 29k June rise for goods jobs that modestly under-performed robust factory sentiment readings, alongside a 148k service sector jobs increase that also fell slightly short of assumption. Today’s lean ADP figure trimmed the upside risk for Friday’s jobs report, though we are still comfortable with 200k estimate. The “as reported” ADP figures have overshot private payrolls by 26k per month on average since the methodology change of October 2016. We had undershoots in 4 of the last 8 months and 9 of the last 20 months, or roughly half the time, though with lopsided magnitudes that account for the big “as reported” ADP overshoots on average. We have a 206K average “as reported” ADP gain over the 12 months through May, versus a 195k average BLS private payroll gain. We saw a 40k “as reported’ undershoot in May, but overshoots of 1k in April and 46k in March.
The Dollar slipped slightly following the ADP jobs data, which missed the mark in terms of private payrolls, at 177k. Along with ADP Jobs, US initial jobless claims also released, which increased by 3k to 231k in the week ended June 30 following the 10k increase to 228k in the June 23 week (revised from 227k) .
EURUSD picked up near session highs at 1.1719, while USDJPY was unchanged near session lows at 110.55. EURUSD has currently return back to 1.17s lows, just a breath above R2. A closure at the bottom of the hour close to 1.1705-1.1707, could suggest that the pair could move to a possible correction o R1. Oppositely, a bullish candle at the end of the hourly session could meet the next Resistance level at 1.1732.
Bigger picture, EURUSD remains in broadly consolidative phase after a downtrend from mid-April levels above 1.2400. The range over this phase has been 1.1508 to 1.1851. More of the same looks likely for now. A major “known unknown” is to how deep and how prolonged the Trump-led trade war with major economies will be, and what economic and currency market fallout this will cause, and this keeping directional commitment at bay for now.
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Andria Pichidi
Market Analyst
HotForex
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