EURUSD, Jobless Claims and the Participation Rate

For the second consecutive week, Initial Jobless Claims are lower than expected while Continuing Jobless Claims are higher than expected. How does that square?

Remember that last week NFP data suggested that unemployment was up, while employment also increased. This suggested that the participation rate increased, meaning that people would once again enter the pool of employment/unemployment and start searching for new jobs. In general, as we had discussed then, this is a positive sign for the US economy as it appears that people tend to do this only when they feel that the wages they are being offered are worth it. Taking a step back, having wages being worth it means that employers are searching for people and they are willing to pay more than before, something which is also in accordance with the NFP release.

Thus, the recent data release is supportive of the previous statements suggesting that the overall feeling is that the US economy is continuing to prosper, despite the sluggishness in growth, which can be attributed to the short-term debt cycle.

The Dollar reacted strongly to this piece of information, as it gained 25 pips upon the announcement, following the previous trend. The Dollar is currently trading around 1.1520 against the Euro after President Trump’s comments, trying to break through the 1.1519 Support point (Fib. 61.8%), making it a Resistance if it manages to close below it. Otherwise, the next resistance point stands at 1.1569 (Fib. 100%).

The Dollar’s future could lie in the Fed Chairman’s comments today which, if seen as dovish, could be perceived as Dollar weakness.

Click here to access the HotForex Economic Calendar

Dr Nektarios Michail

Market Analyst


Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.