Yesterday’s jump in oil prices triggered the US dollar depreciation. However, the US dollar turned out to be more resilient than markets had expected. Despite the fact that oil prices are already falling, the US dollar is still losing ground. At the same time, the European statistical data points to a decline in the euro and the pound sterling.In April, the number of unemployment claims in the UK hit 856.5 thousand. The figures almost six times exceed the previous record high logged in February 2009. Market participants were confused by the UK unemployment data. According to the report, the unemployment level dropped to 3.9% from 4.0%. The fact is that the figures reflect the situation in March whereas the claimant count data was provided for April. Thus, the unemployment report cannot show the real labor market conditions. Besides, the lockdown measures in the UK were imposed only in the end of March. In any case, the number of unemployment claims is a signal that the UK’s authorities should be ready for the skyrocketing unemployment. The economic situation in the eurozone in not better. Thus, in March, the eurozone construction output declined by 15.4%. The construction sector activity is likely to slide further. However, such kind of data is of minor importance for the single currency.
At the same time, the US dollar usually strongly reacts to the construction market figures. Today, the US will report on its construction output. The indicator is expected to decrease by 30.1%. It can become one of the most significant falls. Besides, the construction output may continue dropping. The number of building permits could decrease by 28.9%. Thus, the US construction sector is still in recession. It is difficult to predict when it will hit the bottom and start rising again.
During the last seven days, the euro/dollar pair was trading between the levels of 1.0775 and 1.0850. However, it managed to break the upper limit and jumped to 1.0950.
Nevertheless, the market sentiment can hardly be changed. Thus, the main trend may be resumed soon. The upper limit of the main range of 1.1000 may act as a resistance level.
Buy positions can be opened above 1.1020 with the target at 1.1080. The scenario is possible, if the upper limit of the main range is broken and the main trend is changed.
If the zone near 1.1000 weighs on market participants, sell positions can be opened below 1.0945. As a result, the price may turn back to 1.0775.
The pound/dollar pair is recovering after a slump. The current trend will hardly be changed. The bullish momentum may fade away soon. The levels of 1.2250 and 1.2350 may act as resistance that could make the quote return to the support level.
Thus, buy positions can be initiated, if the price consolidates above 1.2270 with the targeted level at 1.2350.
Sell positions can be opened below 1.2210 with the target at 1.2180-1.2150.
FX Analytics – https://www.instaforex.com/forex_analytics
Forex Calendar – https://www.instaforex.com/forex_calendar
Forex TV from InstaForex – https://www.instaforex.com/instaforex_tv
Forex charts – https://www.instaforex.com/charts
Instant account opening – https://www.instaforex.com/fast_open_live_account
Forex Trading Contests – https://www.instaforex.com/forex_contests
List of official InstaForex blogs:
#forex_news #european_session #instaforex_tv