Dollar Lower Despite Sharp Fall in Initial Jobless Claims Waiting for NFP Today
Dollar trades softer against European majors as the brief lift from FOMC statement fades. Economic data from US are solid but provide little support to the greenback. Initial jobless claims dropped -19k to 238k in the week ended April 29, below expectations of 246k. Continuing claims dropped 23k, lowest in 17 years. Challenger report showed -42.9% falls in planned layoff in April. Trade deficit narrowed slightly to USD -43.7b in March. Non-farm productivity dropped -0.6% in Q1 while unit labor costs rose 3.0%.
EUR/USD recovers strongly yesterday after being supported above 4 hours 55 EMA. But it's staying below 1.0949 temporary low. Intraday bias remains neutral for the moment. At this point, further rise is still in favor as long as 1.0851 minor support holds. However, choppy rebound from 1.0339 is seen as a correction. Hence we'd look for topping again on next rise. Meanwhile, on the downside, break of 1.0851 will turn bias to the downside for 1.0777 support first.
In the bigger picture, as long as 1.1298 key resistance holds, whole down trend from 1.6039 (2008 high) is still expected to continue. Break of 1.0339 low will send EUR/USD through parity to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. However, considering bullish convergence condition in weekly MACD, break of 1.1298 will indicate term reversal. This would also be supported by sustained trading above 55 week EMA.
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