Yesterday it was retail sales that defied worries about tax hike implications, and today we get more encouraging data from the labor market. The number of jobless claims in the US dropped to 332K, the lowest since January 2008.
The news supports the greenback, but is not enough to push EUR/USD to the next support line, at least not for now.
Jobless claims are released weekly and provide a quick view of the labor market. However, they tend to be revised. In recent months, most revisions were to the upside. For example, the fresh data release included an upwards revision for last week’s data: from 340K to 342K.
So, a better measure is the 4 week moving average. This measure also brings good news: the figure is at around 347K, the lowest since March 2008 – 5 years ago.
The good news joins the excellent Non-Farm Payrolls report from Friday, which showed that the US gained 236K jobs in February.
The current dynamics of the markets are of the “old normal” – good US data boosts the US dollar. No more risk on / risk off for now.
EUR/USD hasn’t reached the next target of 1.2880 just yet, but it is nibbling more low ground each time. 1.2960 serves as resistance, followed by 1.30. USD/JPY remains on high ground at 96.34.Get the 5 most predictable currency pairs