Although the number of continuing jobless claims in the United States dropped to 2,481,000 instead of falling to 2,475,000, weekly claims data came out better than expected.
It is partially because the previous continuing jobless claims results were upwardly revised to 2,603,000 from 2,593,000. Their number decreased by 122,000, missing market expectations of a 118,000 decline.
In addition, the number of initial claims fell by 6,000. Meanwhile, experts had forecast the reading to rise by 2,000. It was due to the revision of previous data from 293,000 to 296,000. Consequently, the figure tumbled to 290,000, although it was expected to decline to 295,000.
The state of the American labor market continues to improve. It comes as no surprise since the greenback is again on the rise and the labor market is a significant factor in determining monetary policy parameters. Therefore, nothing prevents the Federal Reserve from starting Quantitative Easing (QE) tapering now.
The Eurozone’s preliminary business activity data is likely to exert additional pressure on the euro today. Forecasts are pessimistic. The manufacturing PMI is estimated to drop to 57.5 versus 58.6 in the previous period. Meanwhile, the Eurozone’s services business activity could fall to 55.5 from 56.4.
The situation will be no different in the United States. Its manufacturing PMI should decrease to 60.4 versus 60.7 in the previous period. At the same time, business activity in the services sector is forecast to rise to 55.1 from 54.9.
As we can see, the forecast for the US looks more optimistic. Amid a decrease in the manufacturing PMI, an increase in services business activity, a more meaningful indicator, is likely to boost the greenback.
EUR/USD - Technical View
At the peak of its corrective move, EUR/USD came at a standstill in the 1.1620/1.1669 range. This is likely to signal a slowdown in the upward trend and a reversal. On the chart, there is a double top pattern, indicating a change of direction.
The price movement between the 23.6 and 38.2 Fibonacci levels confirms a standstill. The Relative Strength Index (RSI) is trying to consolidate above line 50 on the H4 chart, the first trend reversal signal. On the daily chart, there is a downward trend.
Outlook
The focus is on the pivot point of 1.1620 because consolidation below it will likely lead to a reversal. Consequently, the price might go down to the swing low of 1.1524 as of Oct. 12.
Alternatively, the quote could move in the 1.1620/1.1669 range. It will eliminate the possibility of a reversal, and traders will keep trying to break through the other border of the established range.
In terms of complex indicator analysis, technical indicators are signaling to sell the pair for short-term and intraday trading.