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US weekly unemployment claims disappointed – they jumped to 412K, significantly worse than 379K that was expected. Also the Producer Price Index (PPI) was weaker than expected, pushing back a future rate hike. EUR/USD continues its recovery from the blow it got earlier.

The situation in the US doesn’t really outshine Europe. After many weeks that saw unemployment claims under 400K, they now see a fresh rise above this number. The 4-week moving average is still below this line, but this still is a warning sign.

And for those that thought that an American rate hike will follow the European one sooner than later, a disappointment came from PPI – it rose by only 0.7%, lower than 1.1% that was expected. Core PPI rose by 0.3%, slightly stronger than estimations of 0.2%, but this is quite marginal.

EUR/USD now trades at 1.4422, up from 1.44 before the release, and continuing the recovery. The move is still on.

Earlier today, EUR/USD made big drops down to 1.4365, but managed to recover towards the release of the US data up to 1.4410.

The debt crisis returned to the limelight. Yields on Greek and Portuguese bonds continued rising. This expresses fears of default.

A default in Greece is not denied anymore – after a few months of dismissals and denials, senior German officials, including the finance minister, are now talking about it as a reality. The austerity measures were just too harsh. Without growth, the debt struck country just doesn’t have the funds to pay its debt.

Regarding Portugal, it already officially asked for a bailout, but it faces (at least) two problems: there’s no government in Portugal at the moment, and the elections in Finland, a rich country which is expected to pay for some of the a bailout, pose a risk for the whole move.

Levels below are 1.4370 and 1.4282. Levels above are 1.4450 and 1.4520. For more technical analysis and upcoming events, see the EUR/USD forecast.