Mildly upbeat unemployment claims on Thursday was able to generate a positive response on the USD Index, but only just. After looking like it would extend its latest string of losses once more, the DXY is trading flat after US Initial Jobless Claims came in at 1314K, just 99K lower than last week’s figure and also less than the 1375K filings that the markets expected.
Last week’s reading was revised downwards from 1427K to 1413K. In the previous 6-7 weeks, the number of recently unemployed people filing for unemployment benefits in the US has been undergoing a gradual reduction, but numbers are still in the millions. There have also been reductions in the 4-week average, the advance seasonally adjusted insured unemployment rate as well as the advance number for seasonally adjusted insured unemployment change.
However, the figures continue to remain high. They are nowhere near pre-pandemic levels, suggesting that the stimulus measures designed to shore up the employment sector’s recovery are yet to kick in.
Technical Outlook for DXY
The USD Index is resting on the 96.46 support; a price level from which it bounced last week. This bounce was rejected at the 97.16 resistance, and the pullback eventually broke down the channel that encapsulated price action from June 10. If the downside move allows the DXY to break below the 96.46, the next logical target would be the 96.07 price level (June 11 low), and after that, the 95.71 price level (June 10 low) becomes the next in line.
DXY Daily Chart