With new unemployment claims on the rise, investors should watch for the direction of the U.S. dollar, which is facing resistance

With new unemployment claims on the rise, investors should watch for the direction of the U.S. dollar, which is facing resistance

08.03.2024

In the previous day’s U.S. currency trading, the U.S. dollar fell against the euro after the number of new U.S. unemployment insurance claims, released on the 7th, rose to 1.906 million from 1.905 million the previous week, exceeding market expectations of 1.872 million. The EUR/USD pair rose from 1.0867 to 1.0955, with the price extending to the +2σ level of the 4-hour Bollinger Bands.On the higher timeframe daily chart, the EUR/USD RSI is at 70, indicating an overbought condition, so traders should be cautious of corrective price movements during U.S. trading hours.

Following yesterday’s ECB meeting, where the policy rate was kept unchanged at 4.50% in line with market consensus, the euro briefly fell to become the weakest currency immediately after the announcement. The EUR/GBP pair dropped from 0.8562 to 0.8523, falling to the -3σ level on the 4-hour Bollinger Bands. We need to assess whether the euro will continue to weaken against other currencies.

Today's economic indicators include the Japan Economic Watchers Survey at 2:00 PM, Germany's Industrial Production and Producer Price Index at 4:00 PM, and France'sFrance’s trade balance and current account balance at 16:45, the Eurozone’s Q4 GDP at 19:00, remarks by Williams, President of the New York Fed, at 21:00, and Canada’s employment report, the U.S. employment report, and Canada’s capacity utilization rate at 22:30. We will closely monitor the direction of the U.S. dollar, which is facing resistance due to rising initial jobless claims.