Dollar Weakens as Unemployment Claims Rise

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Dollar Weakens as Unemployment Claims Rise
Dollar Weakens as Unemployment Claims Rise

Dollar Weakens as Unemployment Claims Rise

The unemployment claims for the past week increased significantly up to 374,000 against the previously recorded figure of 308,000 and it wouldn’t be wrong to say that the government shutdown last week caused this. A huge number of federal government employees were brought down from their permanent jobs to temporary level, while many of them were laid off.

The euro gained nearly 50 points against the greenback on Thursday where it bounced back from 1.3485 and is currently trading at its 50% bullish correction level on its Fibonacci retracement scale at 1.3534.

The bulls may take the pair further up to its 31.8% retracement level where its critical resistance area is present at 1.3561; however, the sellers might start entering the market again at this level.

On the other hand, if it moves below its today’s pivot point level at 1.3524 then its next targets would be to test its support levels at 1.3513 1.3503 and then yesterday’s low at 1.3485.

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The British pound witnessed a notable recovery yesterday where it gained 80 points against the U.S. dollar after bouncing back from the psychological support level of 1.5900. Apart from poor U.S. unemployment claims figures, another factor behind giving support to bulls in the market was the BoE decision of keeping the interest rate and asset purchase facility level unchanged.

Currently the pair is hovering at 1.5986 level where a move above its resistance level at 1.6003 could lift it up further to 1.6015 1.6025 and 1.06047; whereas, a move below its today’s pivot point 1.5958 could result in dropping it down to 1.5947 1.5936 and 1.5908.

Gold Drops below 1300

The precious metal dropped back in its bearish area where it broke the psychological support level of 1300 as the U.S. Lawmakers are getting closer to make a decision to lift up the debt ceiling that would help the U.S. economy to avoid default. Therefore, it is safe for the traders to sell the metal as long as it is below 1300 level, while on the other hand the Wall Street gained on Thursday as investors seem to be getting back in action to long the market.

To contact the reporter of this story: Jonathan Millet at john@forexminute.com