Global macro analysis for 19/05/2017:
Another set of the good news from the US job market has hit the newswires. US Initial Jobless Claims declined to 232k in the week ending May 13th from 236k previously while consensus forecasts were for a small increase to around 240k for the week. The Continuing Claims declined as well to the level of 1,898k for the week ending May 6th from a revised 1,920k the previous week and this was the lowest reading since November 1988. The decline in Continuing Claims is the important evidence that the US labour market is continuing to strengthen as discouraged workers are able to re-enter the job market again. Moreover, this strong data will strengthen the FED view regarding the interest rate increase in the nearest future.
Let’s now take a look at the EUR/USD technical picture on the H4 time frame. The market had bounced from the technical support at the level of 1.1079 and now is heading higher towards the next technical resistance at the level of 1.1171. Nevertheless, the market conditions are still overbought and the momentum is not strong so far. This is why the move upward might get capped at the resistance and the price will get back to the trading range. Only a sustained breakout below the level of 1.1022 will change its bias from bullish to bearish.
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