- US Initial jobless claims fell by 5k in the past week to 240k
- Reading near multi-decade lows showing strength of labour market
- USD remains subdued near key support
The weekly initial jobless claims in the US have come in slightly better than expected with a print of 240k coming in marginally lower than the 242k expected. The prior reading saw a minor adjustment higher of 1k to 245k but overall the theme here remains as it has been for the past couple of years – one of strength in the US labour market.
The initial jobless claims have steadily declined in recent years with a clear downtrend present. Today’s reading has done nothing to change this. Source: Bloomberg
In terms of market reaction it’s been fairly muted with the USD still languishing around key support just above the 92 handle. There was a swoon lower in the USD index last night around 6pm but this was met by some buying and the market is just about managing to keep its head above water heading into tomorrow’s NFP.
From a technical standpoint there are some signs of exhaustion in the USDIDX that could suggest the move lower is little bit overdone. If we look at the relative strength index (RSI) on H4 there is a fairly clear divergence lately with further declines in price not being accompanied by lower RSI readings.
There is a clear divergence between the price and RSI in recent sessions. This could be seen as a signal that the selling power is on the wane. Source: xStation