US dollar falls after disappointing initial jobless claims data
Global stocks rallied as investors remained confident that the United States will get the fifth stimulus before the election. In separate statements, President Trump asked Congress to pass separate stimulus bills. Parts of the proposed funds will go to individuals through the $1,200 checks. Others will go to support the airline industry while other funds will go towards the Paycheck Protection Program. His statements came a day after the president received criticism for postponing further talks until after the general election in November.
The US dollar declined against key peer currencies as traders focused on stimulus. The currency also reacted to the latest jobless claims and housing starts data. Data from the Bureau of Labour Statistics (BLS) showed that more than 840k Americans filed for unemployment benefits in the previous week. The figure was worse than the median estimate 820k by a panel of economists polled by Reuters but lower than last week’s reading of 849k. The continuing jobless claims dropped to 11.4 million from the previous 11.76 million.
The euro declined slightly as traders reacted to the minutes by the European Central Bank (ECB) and the mixed trade numbers from Germany. The minutes from the ECB showed that members were convinced that their policies were important in cushioning the Eurozone’s economy as it goes through its worst crisis in decades. Still, they remained concerned about the uneven recovery of the economy. They highlighted data showing that the important services sector was lagging behind the smaller manufacturing industry. Earlier today, data from Germany showed that the country’s exports rose by 2.4% in August while imports rose by 5.8%. As a result, the country’s trade surplus narrowed from €18 billion to €15.7 billion.
The EUR/USD pair declined from the intraday high of 1.1781 to a low of 1.1751. On the hourly chart, the price is below the dots of the Parabolic SAR indicator. It is also a few pips below the 25-day exponential moving average. The pair has also re-entered the previous triangle pattern that is shown in green while the RSI has started to drop. The pair might continue in the current range during the American session.
The XBR/USD pair rose to an intraday high of 43.05 as traders reacted to Hurricane Delta. On the four-hour chart, the price is trading at the highest point on 23 and 29 September, making it an important resistance zone. It is also above the 25-day and 15-day exponential moving averages. The Relative Strength Index (RSI) has started to rise while the Average True Range (ATR) has been falling. Therefore, it seems the bulls are now in control, meaning that the price could continue rising, potentially to 44.0.
The XAU/USD pair rose to an intraday high of 1900 mostly because of a weaker US dollar. On the hourly chart, the pair is trading above the 25-day EMA. It is also above the small pink ascending trendline. Also, it is attempting to move above the highest point on Tuesday. The RSI, on the other hand, has risen and is close to the overbought level of 70. Therefore, the price is likely to continue rising as bulls aim for the next resistance at 1912, which is along the lower line of the green channel.