The US Unemployment Claims indicator is released weekly, and measures the number of people filing for unemployment for the first time during the previous week. An increase in unemployment figures will dampen consumer spending and could hurt the dollar as well.
Here are all the details, and 5 possible outcomes for EUR/USD.
Published on Thursday at 15:30 GMT.
Unemployment claims is an important economic indicator of consumer confidence in the economy. It helps measure future spending behavior, as consumers are more likely to spend if they are confident that unemployment is dropping. In turn, an increase in consumer spending sends a strong signal that the economy is healthy and growing.
The previous unemployment claims release came in at a disappointing 428K, as the market forecast was for 410K. The forecast for this past week stands at 418K, which other than last week’s figure, would be the highest reading in over a year. Thus, unemployment in the US continues to pose a major problem which is severely hampering the economy.
Sentiments and levels
The Euro has made a slight recovery, but the Greek debt crisis could reverse this movment. In the US, the Federal Reserve is looking for ways to lower interests rates in the hope of stimulating the weak econonomy. So, the overall sentiment is neutral on EUR/USD towards this release.
Technical levels, from top to bottom: 1.3950, 1.3838, 1.3750, 1.3710, 1.3620, 1.3570 and 1.3510.
- Within expectations: 406K to 430K : In such a case, EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 394K to 405K: An unexpected lower reading can send the pair well below one support level.
- Well above expectations: Below 394K: Given the persistent high unemployment figures, the chances of such a scenario are low. A second support line or more might be broken on such an outcome.
- Below expectations: 431K to 441K: A poor reading could push EUR/USD higher, and one resistance line could be broken.
- Well below expectations: Above 441K. A sharp increase in the reading will hurt the dollar, and the pair could break two resistance levels.
For more on the Euro, see the EUR/USD forecast.Get the 5 most predictable currency pairs