After 16 weeks of record breaking jobs data, the situation seems to take a turn fr the better
The US Initial Jobless Claim figures released today offer a better view of the US labor market, falling to 1.314 million from a prior value of 1.413 million and below forecasts of 1.375 million.
Although it remains above 1 million for sixteen consecutive weeks, this figure, which is published with a delay of one week, begins to show slight signs of improvement.
This was the only significant economic figure on this week's calendar. Still, its immediate impact has not been relevant beyond modestly boosting US stock indices to return to green after publication.
USA500 continues to move in a narrow range throughout this week between 3124 and 3184, which it needs to overcome in a daily close to pave the way for further advances towards the latest highs around 3230.
In the foreign exchange market, the US Dollar is tiptoeing towards lower levels as the markets become less volatile, and high-risk aversion episodes are fading.
The US Dollar strengthens the current market scenario when investor fear increases as it acts as a safe haven.
But the interest rate structure that the Federal Reserve has decided to implement for the US currency leaves it in a vulnerable situation, given that it is the lowest level in its history.
As the situation normalizes and risk appetite emerges among investors, the US Dollar will lose territory against the major currencies.
An indicator of the Dollar's general performance in the current environment is the price of the US Dollar against the Chinese Yuan.
As China's economic figures began to show signs of recovery, as early as June, and at the same time, control of the pandemic was being achieved by the Asian country, USD/CNH changed its previous uptrend and started a movement to the downside.
This is still ongoing and has already drilled the support level of 7.0000 and is heading towards the area of 6.9000 and 6.8500.
USD/CNH is an excellent leading indicator in this case.
The same is observed in the evolution of the Dollarindex, a weighted index of the US Dollar price against a basket of the major currencies in which EUR/USD has a higher weight, around 56%.
Dollarindex is close to the support area around 96 that it needs to drill to make way for further falls that would trigger EUR/USD rises to its intermediate resistance level around 1.1500 and even up to 1.1600.
This level represents the 50% Fibonacci retracement level for the entire bearish leg started in January 2018 and with lows in March this year.
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