The EURUSD pair rose 30-minutes after the Department of Labour released the jobless claims for the week that ended on Saturday.
The weekly jobless claims increased to more than 3.28 million, which is the highest number in history. The data was higher than the 1 million that economists polled by Refinitiv were expecting but was relatively lower than the 3.4 million that economists at the Economic Policy Institute (EPI) were expecting. It was significantly higher than the 281k number that was released last week.
The data shows the dire state the American economy is in, with most cities looking like ghost towns. States like California and Washington have asked people to stay at home to prevent Coronavirus from spreading.
The number came a few hours after the Senate voted in favour of a $2.2 trillion rescue package that will see many companies and individuals receive federal money. Small and medium-sized companies will receive more than $350 billion while most American adults will receive more than $1,200. The latter amount is relatively small if the current lockdown continues for more weeks.
The challenge for the US economy is on how long the lockdown remains in place. Donald Trump has said that he expects the economy to reopen in the next few weeks. Meanwhile, Ford announced that it would reopen some of its plants in the US.
Reopening faster could lead to a situation similar to what happened in Taiwan. In the country, the number of cases rose significantly after the leaders reopened its factories.
This is an update to a report I did earlier today, where I predicted that the pair will continue rising to test the important resistance level of 1.1040. On the hourly chart below, we see that the pair crossed the important resistance level of 1.0900 yesterday. On the chart, I have introduced the 14-day and 28-day EMA and the TRIX indicator, which confirm that the upward trend will likely continue.