Weekly Claims eased to 365K

Author: Trade Pro Skills

Thursday, 01 July 2021 Number of words: 342 Study time: 2 Minutes Views: 44


Initial jobless claims in the lowest level since the beginning of the pandemic

By: Ahura Chalki

Market analyst – IFC Markets

According to the United States Department of Labor (DOL) data, weekly claims for unemployment benefits drop to 364K, lower than 393K expectation, 51K lower than the week before that, while it was revised to 415K from 411K. With this week's numbers, 4-weeks average claims decreased 6K to 392,750 claims. On the other hand, continuing claims increased to 3.47 million for the week ended June 19. 

I have to mention once more that on June 19, ten state governments ended unemployment benefits earlier than the scheduled plan to inspire more Americans to return to work and solve the current labor shortage, which is affected by the decrease in initial jobless claims in these states, faster than other states.

These numbers, especially after earlier labor data from Europe, which shows that the unemployment rate falls to 7.9% in May from 8.1% of April, generally confirm that generally economy is moving forward. If the newest wave of Coronavirus does not hit the markets, recovery must be as expected. 

Market reaction - USD Index 

After immediate reduction, DXY again back to its overall uptrend. Besides Employment data, ISM manufacturing PMI at 60.6 was much less than 61.2 in May and market expectations. Still mixed data, supposed to support the current uptrend. The market will be waiting for tomorrow's NFP number to decide. 

In the intraday charts, RSI above 55 and while the price is rasing above PP(92.20) and moves above OBV trend line, technically repeating the earlier touched R1 at 92.50, can open the doors for following resistances at 92.70 and 92.95. On the flip side, breaching under the first support at 92.00 can put the index slightly under pressure for the short term. 

jobless claims

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