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Well today’s economic data print has a lot of people talking. US jobless claims came out at a record 3.28 million. The market consensus was expecting 1 million, but many knew it would have been worse…but by this much?
“The number shatters the Great Recession peak of 665,000 in March 2009 and the all-time mark of 695,000 in October 1982. The previous week, which reflected the period before the worst of the coronavirus hit, was 282,000, which was higher than expected at the time.”
Despite President Trump’s hope of reopening the economy by Easter, if virus cases continue to spike and further lock down measures are implemented, these jobless claims numbers can get even worse. Hence why this relief package is crucial, as one component is to provide money to small business’ and corporations in order to keep employees on the payroll and not lay them off. A literal freeze of the economy and system until things get back to normal. By the way, you can read all 883 pages of stimulus bill that is heading to congress here: https://assets.bwbx.io/documents/users/iqjWHBFdfxIU/rY0Bl72CufkE/v0
So when economic data like this comes out negatively, it affects the US Dollar. Better than expected jobless claims would be US Dollar bullish, because it meant the US economy was doing well. Worse than expected jobless claims would be US Dollar bearish, because it meant the economy was worsening. To be honest, it is very difficult to say that this economic data even matters at this point. Even though the US Dollar did move down on this news, it was already showing exhaustion signs. Something that we in fact did play on the Equity Guru Discord channel. We went over the DXY chart, and also EURUSD, USDCAD, USDCHF, USDCAD and USDSEK.
The US Dollar is now at a very crucial level as you can see by the chart. We are now retesting the previous breakout zone and the psychologically important 100 level. We will be watching this chart for the next few days, even weeks. What the US Dollar does will be important going forward not only for economics, but for the entire world. Ideally, the confirmed retest would require a break and close over 103…putting us close to the 2016 highs around 104.