While fears around the newly discovered Omicron COVID-variant have taken center stage, it is important to keep track of the data flow we have at the moment. There is a slew of crucial US data to keep an eye on with the ADP employment number up first and the ISM manufacturing up next.
We also have Fed’s Powell continuing his testimony at the Senate Banking Committee. While the impact of today’s US data will no doubt be diluted given the current backdrop, there is still potential for volatility on key data surprises.
Firstly, for the ADP number, the market is looking for 525,000 from 571,000 earlier. A print in this region or below will no doubt be a little disappointing ahead of the nonfarm payrolls on Friday and could further weigh on the US dollar. However, for the ISM manufacturing readier, the market is looking to rise to 61.3 from 60.8 before that. Given the current landscape, it would likely take a solid beat on both numbers to see USD higher.
Where to Trade Today’s US Data?
The fall back in USD/JPY has seen the market reversing hard from the 115.45 level, trading down to test the 112.72 level. The level is holding as support for now. However, any USD weakness from today’s data will likely see a break of the level, targeting a move down to the 111.70 level next.
