• ADP falls short of an estimation in May
  • US trade balance meets expectations
  • USD remains muffled following the data

There is not time to take a breath today as a slew of macroeconomic releases floods us. After the ECB minutes which have been treated quite bullish looking at the EURUSD chart, another event could be USD-negative.

The ADP reported that the US economy added just 158k new jobs compared with an estimation which had looked for 185k. Otherwise, a reading for April was revised down from 253k to 230k (let us recall that in the prior month the ADP report substantially missed a figure released by NFP). Although, a change in employment is not so important at this stage as the US economy is already at or close to full employment, it usually draws some focus.

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According to ADP there could be another feeble print in NFP tomorrow. Source: Bloomberg, XTB Research

Having assumed that the ADP is right, there could be second quite a poor reading tomorrow as ADP suggests ca. 150k which could be reported by the NFP on Friday. That said, there is no doubt that the most relevant issue nowadays is a change in wages. If they proved to be higher than expected tomorrow, it could bode well for inflation and the USD as well.

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US trade balance turned out to be almost in line with expectations. Source: Bloomberg, XTB Research

Besides, there was trade data from the US which more or less met market anticipations. In a yearly basis there was a small uptick, as a result deficit narrowed in May to $46.5bn. Taking a closer look at the chart above we could see that import was slightly lower than previously, to be precise it declined 0.1% mom while export picked up 0.4% mom.

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The GPBUSD is coming off a crucial resistance and could go towards the latest lows located in the vicinity of a 23.6% retracement. Source: xStation5

Technically, the GBPUSD could be prone to continue sliding towards the nearest support zone placed in the vicinity of a 23.6% retracement after a rebound from 1.2980. Furthermore, decreases could be underpinned by the interest rate market as well. Taking a look at FRA 9×12 contracts one could suppose that the pair could be a bit above 1.28.

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FRA 9×12 rates for GBP and USD suggest that the pair could be a bit above 1.28. Source: Bloomberg