The U.S. Initial Jobless Claims figure for the week ending March 28 rose to 6,648,000 versus an estimate of 3,500,000 and the previous week’s revised figure of 3,680,000. Does it even matter what the actual number is? Once you reach a certain point, whether it is 3 million or 6 million, the number is bad. This data is truly insane to think about. That is roughly 10 million people filing for U.S. initial unemployment claims over the last two weeks.
As we discussed earlier in the initial claims preview, as the United States goes under lockdown, state by state, these numbers are likely to continue to remain high. Some states, such as Florida, are just implementing lockdowns, therefore, many people in these states have not yet filed for unemployment benefits. This should keep the figures high over the next few weeks. Most of those filing for claims have been in the food and service industries. As restaurants, bars and nightclubs are forced to temporarily close and workers need to remain at home, there is no other choice for them but to file for unemployment.
Interestingly, after the data was released, the US Dollar Index moved lower 1.5% on the day. However today, after moving higher during this week, the DXY is continuing higher. The DXY has broken higher through the psychological resistance level at 100.00, and well as, the horizontal resistance and the 38.2% Fibonacci retracement from the March 20 highs to the March 27 lows to 100.25. The next resistance level is the 50% retracement level at 100.62. If the U.S. dollar reverses and moves lower, support now comes in between 99.90 and 100.06. (If this occurs, it would set up a shooting star candlestick formation on a daily timeframe, which would indicate a possible move lower).
Tomorrow, Nonfarm Payroll data will be released. The expectation is for -100,000 jobs. The unemployment rate is expected to uptick from 3.5% to 3.8%. However, this data may not have its usual impact, as it is too far backward looking. Most people will continue to focus on the initial claims data to see how the coronavirus is currently affecting employment, as it is the timeliest of the employment data.