The dollar fell sharply after ADP Research, quite unexpectedly, reported on Tuesday that American companies were, on average, cutting 11,250 jobs per week in October of this year. This indicates that the labor market in the second half of October returned to job losses compared to the beginning of the month.

According to the latest monthly ADP report published last week, the number of private-sector jobs in October increased by 42,000 after declines in the previous two months.

The new data came after several companies announced plans to reduce staff in recent weeks. According to a report from employment firm Challenger, Gray & Christmas Inc., employers announced the largest number of layoffs in October in the past two decades, raising concerns about the state of the labor market.

This warning sign comes amid persistent inflation and high interest rates intended to curb it. Many fear that the Federal Reserve's aggressive policy could further slow down the labor market, as layoffs have affected various sectors of the economy — from tech giants to manufacturing firms. The rise in job cuts is also alarming because it underscores the need for close monitoring of the labor market and measures to support those who have lost their jobs. Separate data from the University of Michigan showed that 71% of respondents expect unemployment to rise next year — the highest figure since 1980.

The longest government shutdown in U.S. history has delayed the release of key economic data, including employment reports for September and October. Investors have been relying on other indicators, such as those from ADP, to fill in the gaps. Last month, ADP also announced that it would begin publishing a four-week moving average of total private-sector employment changes.

According to economists at Goldman Sachs Group Inc., U.S. employment in October decreased by 50,000 when taking into account employees participating in government furlough programs. They now see an increased risk of further deterioration in the labor market.

All this suggests that the chances of an interest rate cut in the U.S. in December of this year are much higher than they were a week ago, which could lead to another decline of the U.S. dollar against a range of risk assets.

Technical Outlook for EUR/USD

As for the current technical picture of EUR/USD, buyers now need to think about taking control of the 1.1590 level. Only then will it be possible to aim for a test of 1.1620. From there, it could rise to 1.1640, but doing so without support from large players will be quite difficult. The farthest target would be the high of 1.1668. In the event of a decline in the trading instrument to around 1.1570, I expect significant activity from large buyers. If none appear, it would be better to wait for a renewal of the 1.1540 low or open long positions from 1.1520.

Technical Outlook for GBP/USD

As for the current technical picture of GBP/USD, pound buyers need to take the nearest resistance at 1.3150. Only that would allow them to target 1.3181, above which it will be quite difficult to break through. The farthest target would be the 1.3215 level. In case of a decline, bears will try to regain control over 1.3120. If they succeed, a breakout of this range would deal a serious blow to bull positions and push GBP/USD down to the 1.3085 low, with the prospect of a further move toward 1.3050.