Jobless Claims under 500K, PPI above 6%

EURUSD’s following targets?

By: Ahura Chalki

Market analyst – IFC Markets

Producer Price Index (PPI) y/y published earlier confirms that average changes in selling prices received by domestic producers of goods and services in April, compared to the same month of the previous year, raised by 6.2%. The figure in March was 4.2%, and the expectation for this month was 4.9%. Released data, added the current inflation fears in the market. 

On the other hand, US weekly jobless claims dropped to 437K, with a 534K 4-Week Average. Continuing claims also decreased to 3.655M. 

PPI numbers must continue yesterday’s CPI effects in the market and push the USD higher as inflation worries raising with these numbers. And Jobless claims also supposed to help the positive sentiment of the market. Bring more reason for FED to convince that economy moving forward, and there is no need for more stimulus. The next step can be to Specify when to raise interest rates. 

However, it is all on the paper, and based on FED official speeches, they are still confident with data and want to hold the current level of bond purchasing and interest rate. 

Stock markets, as was expected, started to regain most of yesterday’s loss, and now the market must start being more logical with PPI and Jobless Claims numbers. 

Market Reaction:

The US then years Treasury Yields rise above 1.67%, targeting 1.70%. Demand for USD raising in past days, and it sent the EURUSD down to 1.2050. Since the EU calendar was almost empty today, the pairing movement was mainly affected by the USD rate. The EUR/USD was not able to cross over 1.21 after touching a weekly low. Technical indicators in the H1 chart mostly show a downtrend move, and the latest upside move still does not have enough strength to count on. For pairing, key levels sitting on 

Pivot Point: 1.2095

Support levels: 1.2050 / 1.2000 / 1.1960

Resistance levels: 1.2110 / 1.2150 / 1.2190

EURUSD


Risk Warning: Trading-Leveraged Products such as Forex and Derivatives may not be suitable for all investors as they carry a high degree of risk to your capital. Please ensure that you fully understand the risks involved, considering your investment objectives and level of experience, before trading, and if necessary, seek independent advice.

Related post