Just When You Thought Initial Claims Couldn’t be Any Worse….

Once you reach a certain point, the number is just BAD!!

FOREX 7

The US Initial Claims figure for the Week ending March 28th rose to 6,648,000 vs an estimate of 3,500,000 and the previous weeks revised figure of 3,680,000! Does it even matter what the actual number is?  Once you reach a certain point, whether it is 3,000,000 or 6,000,000, the number is BAD!! This data is truly insane to think about.  That is roughly 10,000,000 people filing for US initial unemployment claims over the last 2 weeks!

Source: Tradingeconomics.com, USDOL

As we discussed earlier in the initial claims preview, as the United States goes under lockdown, state by state, these numbers are likely to continue to remain high.  Some states, such as Florida,  are just implementing lockdowns, therefore many people in these states have not yet filed for unemployment benefits.  This should keep the figures high over the next few weeks.  Most of those filing for claims have been in the food and service industries.  As restaurants, bars,  and nightclubs are forced to temporarily close and workers need to remain at home, there is no other choice for them but to file for unemployment! 

Interestingly, last when after the data was released, the US Dollar Index (DXY) moved lower 1.5% on the day.  However today, after moving higher during this week, the DXY is continuing higher!  The DXY has broken higher through the psychological resistance level at 100.00, and well as, the horizontal resistance and the 38.2% Fibonacci retracement from the March 20th highs to the March 27th lows to 100.25.  The next resistance level is the 50% retracement level at 100.62. If the US Dollar reverses and moves lower, support now comes in between 99.90 and 100.06.  (If this occurs,  it would set up a shooting star candlestick formation on a daily timeframe, which would indicate a possible move lower).

Source: Tradingview, FOREX.com

Tomorrow,  NonFarm Payroll data will be released.  The expectation is for -100,000 jobs.  The unemployment rate is expected to uptick from 3.5% to 3.8%.  However, this data may not have its usual impact, as it is too far backward looking.  Most people will continue to focus on the initial claims data to see how the coronavirus is currently affecting employment, as it is the timeliest of the employment data.


More from USD

Related Articles

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.