Forex, oil, gold, and stocks on April 4-8
Last week, there were sharp swings in USDJPY, a decline in oil prices, and a surge in Tesla stock. What's next?
US unemployment is soaring: a trigger for the USD
What?
Coronavirus and following shutdowns of American cities, including New York, the US financial center, cause a huge disruption of the American labor market. Companies operating in energy, travel, transportation, and services sectors are forced to fire their workers in order to cope with financial difficulties. Analysts predict especially tough times for Nevada and Florida: the states which are tourism-dependent.
What to watch?
While we are waiting for the complete monthly employment data on April 3, today we can already assess the number of people who lost their jobs last week. We are talking about the weekly unemployment claims – the earliest job data. The release is expected at 14:30 MT time. Generally, it shows the number of individuals who requested unemployment insurance within a week. According to analysts, the unemployment claims will soar to 1000K – the record level in history. For now, the highest level was in October 1982 with 695K claims recorded.
What does it mean for the currency market?
If the unemployment figures are that high, it will generate additional weakness for the USD. The currency has been already under pressure after the US Senate has approved the $2 trillion virus rescue plan. Looking at the H4 chart of EUR/USD, we can see that the pair has risen above the 50-period MA and is testing the 1.0950 level. The next resistance will lie at 1.0980 (200-period SMA) and 1.1. What if the unemployment claims are not so worrying (i.e. lower-than-expected)? In that scenario, we will be looking for a retest of 1.0890 level. The next support will be placed at 1.0830.
Similar
Trading on geopolitics on March 14-18
Geopolitical factors and inflation remain the main drivers of financial markets. Let’s see how to use that in trading!
Forex, stocks, oil, and gold on Feb 28 - March 4
Last week was super intense! Geopolitical turbulence made the Russian ruble the most volatile currency. Gold rose and fell by more than 8000 points each time.
Latest news
What’s New with Australian Unemployment Rate?
The Australian Bureau of Statistics will announce the updated Unemployment Rate and Employment Change data on Thursday, May 19, at 04:30 MT.
Can the UK CPI surprise?
The UK Office for National Statistics will publish Consumer Price Index (CPI) data on Wednesday, May 18, at 09:00 MT.
The US Retail Sales Update
The US Census Bureau will announce Core Retail Sales and Retail Sales on Tuesday, May 17 at 15:30 MT.
