With the U.S. dollar facing resistance due to a rise in new unemployment insurance claims, investors should watch for its direction

With the U.S. dollar facing resistance due to a rise in new unemployment insurance claims, investors should watch for its direction

08.03.2024

In the U.S. currency market the previous day, 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 RSI for EUR/USD stands at 70—an overbought signal—so traders should be wary of corrective price movements during U.S. trading hours.

Following yesterday’s ECB meeting, where the policy rate was held steady at 4.50% in line with market consensus, the euro briefly fell to become the weakest currency immediately after the announcement.The euro/pound pair fell from 0.8562 to 0.8523, dropping to the -3σ level of 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 14:00, Germany’s Industrial Production and Producer Price Index at 16:00, and France’strade balance and current account balance at 16:45, Eurozone Q4 GDP at 19:00, remarks by Williams, President of the New York Fed, at 21:00, and Canadian and U.S. employment reports along with the Canadian capacity utilization rate at 22:30.We will closely monitor the direction of the U.S. dollar, which is facing resistance due to an increase in initial jobless claims.