💲Dollar retreats ahead of ADP

The dollar erased morning gains and is currently losing against most currencies. The EURUSD pair broke above the 1.1800 level and several important resistance points including the 61.8 retracement of the last downward impulse, the 50 EMA and the upper limit of the 1:1 structure. Next key resistance is located around the 1.1850 level.

Today at 1:15 PM BST key data from the labor market will be released, namely ADP is a report that shows employment growth in the private sector. Expectations point to a reading of 613k. Compared to the previous reading of 330k (last NFP report showed that the US economy added nearly 1 million jobs in July). If today's reading falls above the consensus, then the dollar will have a chance to return to the uptrend due to tapering concerns. On the other hand, if the report disappoints, then EURUSD may be heading towards 1.1850.

EURUSD pair is strengthening ahead of the ADP report. Source: xStation5

Federal unemployment benefits of $ 300 a week will expire early next week (September 6). It is estimated that approximately 7.5 million Americans will stop receiving unemployment benefits. The authorities are unlikely to extend this program. This means that many Americans will be forced to return to the labor market. For several months, some states had previously withdrawn from supporting the unemployed. In September, the program ends at the federal level, which may mean that the data for the month will show a really strong increase in employment.

Compared to the previous years, Federal unemployment benefits in the US expire at a time when the programs are used by many more citizens compared to 2013 and 2003 (back then benefits were received by less than 2 million Americans, currently around 7.5 million). Source: Century Foundation