US JOLTS Preview: Job openings expected to decline to still-high 9.35 million in October

• The US JOLTS data will be watched closely by investors ahead of the November jobs report.
• Job openings are forecast to edge lower to 9.35 million on the last business day of October.
• US labor market conditions remain out of balance as the Fed refrains from tightening policy further.

The Job Openings and Labor Turnover Survey (JOLTS) will be released on Tuesday by the US Bureau of Labor Statistics (BLS). The publication will provide data about the change in the number of job openings in October, alongside the number of layoffs and quits.

JOLTS data will be scrutinized by market participants and Federal Reserve (Fed) policymakers because it could provide valuable insights regarding the supply-demand dynamics in the labor market, a key factor impacting salaries and inflation.

What to expect in the next JOLTS report?

The number of job openings on the last business day of October is forecast to decline to 9.35 million."Over the month, the number of hires and total separations changed little at 5.9 million and 5.5 million, respectively," the BLS noted in the September report and added: "Within separations, quits (3.7 million) and layoffs and discharges (1.5 million) changed little."

After declining steadily from 10.3 million to 8.9 million in the April-July period, job openings rose to 9.49 million in August and to 9.55 million in September. Meanwhile, Nonfarm Payrolls increased by only 150,000 in October. Since the release of the October jobs report on November 3, the US Dollar (USD) has been struggling to find demand, with the DXY USD Index losing 3% in November.

Markets are fairly certain that the Federal Reserve (Fed) will leave the policy rate unchanged in the last policy meeting of the year. According to the CME Group FedWatch Tool, investors are even pricing in a more than 50% probability that the Fed will lower the interest rate by 25 basis points as early as March.

FXStreet Analyst Eren Sengezer shares his view on the JOLTS Job Openings data and the potential market reaction:

“The previous two JOLTS Job Openings data surprised to the upside and pointed to tight labor market conditions. The disappointing October NFP reading, however, suggests that conditions may have loosened. In case the number of job openings declines below nine million in October, markets are likely to see that as a confirmation of a cooling labor market. Nevertheless, investors could opt to wait to see the November labor market figures before betting on further USD weakness. On the other hand, a reading close to 10 million could help the USD stay resilient against its rivals with the immediate reaction.”

When will the JOLTS report be released and how could it affect EUR/USD?

Job openings numbers will be published at 15:00 GMT. Eren points out key technical levels to watch for EUR/USD ahead of JOLTS data:

“The Relative Strength Index (RSI) indicator on the daily chart declined toward 50 and EUR/USD fell below the lower limit of the ascending regression channel on Monday. These technical developments point to a loss of bullish momentum but sellers could refrain from betting on an extended slide if the pair stabilizes above the 200-day Simple Moving Average (SMA), which is currently located at around 1.0820.

On the upside, 1.0900 (psychological level, lower limit of the ascending channel) aligns as immediate resistance. Once this level is confirmed as support, 1.1000 (psychological level, midpoint of the ascending channel) and 1.1050 (upper limit of the ascending channel) could be set as next bullish targets. If EUR/USD confirms 1.0820 as resistance, technical sellers could show interest. In this scenario, additional losses toward 1.0770 (100-day SMA) and 1.0700 (50-day SMA) could be seen.”