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EUR/USD Rallies, Continues Advance After ADP Employment Misses Expectations by Wide Margin

August 5, 2020 by

EUR/USD was rising during Wednesday’s trading session and continued its advance after the employment data from Automatic Data Processing registered a huge miss compared with market expectations. Other US macroeconomic indicators were good, and the currency pair is currently in a consolidation mode.

ADP employment rose by 167k in July. That was a huge miss compared with the market consensus of 1200k. The June gain got a tremendous positive revision from 2,369k to 4,314k. (Event A on the chart.)

US trade balance deficit shrank a bit from $54.8 billion in May to $50.7 billion in June, close to market expectations of $50.3 billion. (Event B on the chart.)

Markit services PMI rose to 50.0 in July from 47.9 in June according to the final estimate. Market participants were expecting the same 49.6 figure as in the preliminary report. The neutral 50.0 level means that the industry is neither expanding nor contracting. (Event C on the chart.)

ISM services PMI climbed to 58.1% in July from 57.1% in June, surprising experts who had predicted a decrease to 55.0%. (Event D on the chart.)

Crude oil inventories dropped by 7.4 million barrels last week but remained above the five-year average for this time of year. The actual drop was more than two times bigger than a 3.4 million barrel decrease predicted by experts. The stockpiles slumped by 10.6 million barrels the week before. Total motor gasoline inventories rose by 419k barrels. (Event E on the chart.)

Yesterday, a report on factory orders was released, showing an increase of 6.2% in June, which exceeded the average forecast of 5.1%. The previous month’s increase got a negative revision from 8.0% to 7.7%. (Not shown on the chart.)

If you have any comments on the recent EUR/USD action, please reply using the form below.

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