Jobless Claims, NFP 

What means positive data for USD

By: Ahura Chalki

Market analyst – IFC Markets

Based on published data earlier today, the US jobless data during last week fell to a new post-pandemic low of 498,000 from 590,000 of the previous week’s claims, signaling better US economic recovery. But the negative side of the report was in continuing claims (These numbers are reported with a one-month lag to the initial claims numbers), which increased to 3.690 million from 3.653 million.

While we had great employment numbers from both ADP and jobless Claims, now it is much likely to have surprising numbers from NFP. As I mentioned in weekly and outlook, there is even potential to see the numbers even more than 1,000,000 new jobs, which is going to be the first time in the past eight months, simultaneously with economic reopenings as vaccination progress is now take over 150 million of the population in the US. 

With the increasing united states employment rate, we expect to see the US unemployment rate tick down to 5.8% with nonfarm payroll data, but hoping to see Average Hourly Earnings (YoY) fell -0.4%. It can not be that much lousy signal, as we know it’s because of lower-paid jobs, especially in cafes and restaurants that are starting their services, almost in every state. 

Market Reaction

Us dollar index lost 0.4% after today’s Jobless Claims numbers. After selloff in April, in May, USD recovery was much likely with guessing the interest rate hikes or lowering the FED bond purchasing, and it was even more likely after Janet Yellen comments about the requisiteness of increasing the rates; however, the FOMC members speech in subsequent days, played it down, when almost all of them, including FED chair, Powell to clearly says that it is still early to talk about hiking the rates or decrease the purchase. So it means that with positive employment data and hopes of more reopenings, we have to wait for less demand for USD. 

Technically in the H4 chart as mid-term outlook, it moved under the trend line in the chart and OBV trend line, with RSI at 42, altogether signaling of more downtrend. 91.25 still is the pivot point, and trading under this level technically confirms deeper numbers for the dollar index chart. However, Ichimoku cloud still can not confirm the downtrend, and it needs to be breached under 90.70 to be confirmed. 


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