ADP Employment Release in Focus
The US ADP employment release today is drawing a lot of attention ahead of tomorrow’s crucial NFP release. With the last month marking the first full month of reopening in many parts of the US, May’s data is expected to mark a significant uptick across the board. With the Fed placing a great deal of importance on employment (even over inflation currently), today’s data (which is often used as a proxy for gauging the NFP) has the potential to be create a lot of volatility.
Simply put, if todays figure is strong, bullish USD pre-positioning is likely to kick in ahead of the NFP tomorrow. Similarly, if it is weak, bearish USD positioning is likely to extend (market is already short USD) ahead of tomorrow’s release.
Where to Trade the ADP Release?
USDCHF has been on a steady decline since the Q1 highs. However, the recent move lower has seen plenty of bullish divergence creeping in as price tested the .8926 level, suggesting that the market is primed for reversal. We have already seen a break of the local falling wedge pattern, though no follow through yet. If the data is good today, price should break the .9043 level, with bulls targeting .9181 first off. If the data is weak, USD is likely to continue to drift lower.
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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.
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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.