The U.S. dollar failed to regain its leading position against a number of risk assets — including the euro, pound, and Japanese yen — despite a rather impressive ADP employment report for the U.S. labor market.

Federal Reserve Board member Steven Miran called the data showing an increase in employment at American companies in October a "pleasant surprise," although he reiterated that interest rates should be lower.

According to data published Wednesday by ADP Research, private-sector employment increased by 42,000 after a revised decline of 29,000 the previous month. The median economist estimate had expected growth of 30,000. The ADP report took on greater significance as the longest U.S. government shutdown in history continues to delay the release of official economic data.

This unexpected rise in employment signals continued resilience in the U.S. economy in the face of global economic challenges. Despite concerns about inflation and a potential recession, the labor market has shown signs of strength, suggesting a more favorable growth trajectory than previously anticipated. However, Miran emphasized that these data must be viewed in the broader context of the overall economic picture.

"We are still seeing only modest job creation potential. Wage growth continues to slow, and we see signs that labor demand may not be as strong as we would like from a cyclical standpoint," Miran said in an interview. "All of this, in my view, points to rates being somewhat lower than they are now."

It is worth noting that Miran has repeatedly called for a more accommodative monetary policy, opposing policymakers' decisions to cut the Fed's base rate by a quarter of a percentage point in September and again in October, advocating instead for a half-point reduction.

As a reminder, last week the Federal Reserve lowered its key rate by a quarter of a percentage point, reflecting continued concerns about the labor market. Fed Chair Jerome Powell, speaking to reporters after the decision, stated that further rate cuts in December are not predetermined.

Yesterday, a report was also released on U.S. services sector activity in October, which grew at the fastest pace in eight months thanks to a sharp increase in new orders. The ISM Services Index rose 2.4 points last month to 52.4. Readings above 50 indicate growth across most sectors of the economy, and this result exceeded all economists' forecasts. The new orders index jumped 5.8 points to 56.2, the highest in a year. The business activity index, which aligns with the ISM manufacturing index, returned to expansion territory, rising 4.4 points to 54.3.

However, as noted above, these data provided little real support to the U.S. dollar.

Technical Outlook

EUR/USD:At this stage, buyers need to focus on reclaiming the 1.1530 level. Only a break above it will allow for a move toward 1.1550. From there, the price could climb to 1.1580, though doing so without support from major players may prove difficult. The farthest target would be the 1.1620 high. If the pair declines toward 1.1500, I expect significant buying activity in that area. If there are no major buyers there, it would be reasonable to wait for a retest of the 1.1470 low or consider opening long positions from 1.1440.

GBP/USD:Pound buyers need to overcome the nearest resistance at 1.3075. Only that will open the way toward 1.3100, though breaking above it could be quite challenging. The farthest target would be the 1.3130 level. If the pair falls, bears will attempt to regain control at 1.3040. If they succeed, a break below that range would deal a serious blow to bullish positions and push GBP/USD down toward the 1.3010 low, with a further outlook toward 1.2975.