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Forex Signals October 2: Jobless Claims after ADP Report Stuns with Job Losses; Fed Rate Cut Bets Rise
Markets swung between caution and optimism as weaker US employment data rattled the dollar while equities clawed back losses by the close.
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Last updated: Wednesday, October 1, 2025
Quick overview
- The ADP employment report revealed unexpected job losses, causing a sharp sell-off in the US dollar before it stabilized later in the session.
- US equities rebounded, driven by strong performances in the health care sector and positive corporate news, with major drugmakers seeing significant gains.
- Gold prices experienced volatility, reaching new highs before profit-taking led to a decline, while oil prices slid ahead of the upcoming OPEC meeting.
- Bond markets adjusted expectations for monetary policy, pricing in potential rate cuts from the Federal Reserve following the softer labor data.
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MARKETS TREND
Markets swung between caution and optimism as weaker US employment data rattled the dollar while equities clawed back losses by the close.
ADP Report Shocks with Negative Jobs Growth
Thursday’s spotlight fell on the ADP employment report, which unexpectedly showed job losses instead of growth—marking a concerning shift for the labor market. The previous month’s figure was also revised lower into negative territory, underscoring a cooling trend that has been building for months.
The initial market reaction was swift: the US dollar sold off sharply, with USD/JPY tumbling to a session low of 146.59. However, the pair later stabilized as market participants digested the broader picture and weighed the implications for the Federal Reserve’s next move.
Dollar Finds Support on ISM Data and Equity Flows
The dollar regained some footing later in the session, supported in part by a modest uptick in ISM manufacturing data, which hinted at resilience in parts of the economy. The greenback also benefited as flows shifted into US equities, which staged an impressive late-session rebound—from a 0.4% intraday loss to a 0.4% gain just before the close.
Equity Markets Lifted by Health Care Surge and Corporate News
US equities ended on a stronger note, driven largely by robust performances in the health care sector. Sentiment brightened after former President Trump suggested negotiating on pharmaceutical imports instead of imposing tariffs. The policy hint buoyed major drugmakers: Eli Lilly (LLY), Merck (MRK), and Pfizer (PFE) each rallied more than 7%.
Other notable movers included Nike, which rose on better-than-expected quarterly sales, and Intel, which advanced after unveiling a new foundry collaboration with AMD. Meanwhile, financial stocks lagged, reflecting lingering investor caution over the sector’s earnings outlook.
Commodities Mixed: Gold Prints New High, Oil Slides Ahead of OPEC
Precious metals saw some volatility as gold and silver closed higher but trimmed earlier gains, with gold facing profit-taking pressure just below the key $3,900 level.
Oil prices continued to drift lower as traders positioned ahead of the upcoming OPEC meeting this weekend, where production policy could influence near-term energy markets.
Bonds Price in a Softer Fed Path
Bond markets reacted to the softer labor data by adjusting expectations for monetary policy. Traders are now pricing in around 46.6 bps of rate cuts through the end of the year and 106 bps of easing over the next 12 months—reflecting increased bets on a more dovish Federal Reserve.
Key Data Ahead: Thursday’s Watchlist
US Labor Market Under the Microscope
Looking ahead, attention shifts to Thursday’s unemployment claims, expected to edge higher to around 225,000. The ADP data suggest the labor market is losing momentum, with unemployment at a four-year high and job postings below spring levels.
Although layoffs remain limited, the labor force participation rate continues to lag its pre-pandemic strength, raising concerns over longer-term supply constraints. A further uptick in unemployment would push joblessness above the Fed’s threshold for full employment—potentially bolstering the case for another 25-basis-point rate cut at the late-October FOMC meeting.
Last week, markets were quite volatile again, with gold soaring to $3,6065. EUR/USD continued the pullback move toward 1.1450, while main indices closed higher again. The moves weren’t too big though, and we opened 35 trading signals in total, finishing the week with 23 winning signals and 12 losing ones.
Gold Gets Closer to $3,900
Although demand for safe haven assets is still high, gold fell precipitously from record highs following the Fed’s most recent rate decrease as profit-taking was prompted by Powell’s cautious tone. Earlier this week, gold jumped beyond $3,700 and reached $3,707.42 following the Federal Reserve’s announcement of a 25 basis point rate decrease to 4.25%. But the impetus soon waned, and prices dropped back to $3,627, a $80 decline from the new all-time high. As traders locked in profits after the rally driven by dovish predictions, there was a sudden fall but buyers returned on Friday pushing the price $60 higher. Yesterday buyers continued to push and XAU reached another record high at $3,895.
USD/JPY Continues to Bounce in the Range
Foreign exchange markets saw sharp swings. Early in the week, U.S. yield differentials and Japanese capital outflows pushed the dollar above ¥150, but disappointing U.S. jobs data triggered profit-taking, causing the USD/JPY to slide by four yen from its peak. The move underscored persistent volatility as traders weighed Japan’s intervention risks against evolving Fed expectations.
USD/JPY – Weekly Chart
Cryptocurrency Update
Bitcoin Heads Toward $120K Again
Cryptocurrencies remained highly active over the summer. Bitcoin (BTC) climbed to fresh highs of $123,000 and $124,000 in July and August, supported by institutional inflows and technical strength. However, remarks from Treasury Secretary Scott Bessent ruling out U.S. increases to BTC reserves triggered a steep pullback, sending the coin down to $113,000 before recovering above $116,000 last week, however sellers returned and sent BTC below $110,000, breaking the 20 weekly SMA (gray) as well.
BTC/USD – Weekly chart
Ethereum Returns Above $4,o00
Ethereum (ETH) has been similarly strong, surging toward $4,800, its highest since 2021 and near its all-time peak of $4,860. Despite a dip last week, ETH found support at the 20-day SMA, with retail enthusiasm and renewed institutional participation driving fresh upside momentum. However buying resumed and on Sunday ETH/USD printed another record at $4,941 but we saw a retreat which sent ETH below $4,000 yesterday.
ETH/USD – Weekly Chart
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Skerdian Meta
Lead Analyst
Skerdian Meta Lead Analyst.
Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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