The euro managed to climb above the 5-month high. However, the rise could hardly be explained by a decline in the eurozone unemployment rate to 6.5% from 6.6%. Economists had expected an increase to 6.9%. Although the data was really positive, the market remained stuck as though it was waiting for a particular event. Thus, the market showed that the eurozone macroeconomic data is not very important.
Eurozone Unemployment Rate:
A confident rise in the euro began just after the publication of the US unemployment claims report. Although the number of initial claims declined by 16,000, the number of continuing claims surged by 57,000. According to the forecast, the number of first-time claims should have advanced by 18,000, whereas the number of continuing claims should have jumped by 9,000. As a result, the overall number of claims surged by 41,000 instead of 27,000. Notably, the rise in continuing claims is of more importance since it has a stronger influence on the unemployment rate. In other words, the data points to the worsening of the US labor market conditions.
US Continuing Claims
Nevertheless, economists are unlikely to revise forecasts for the US Labor Department report that is due today. The unemployment rate is expected to remain unchanged, whereas employment in the non-farm sector may add 210,000 jobs. While the number of jobs may meet the forecast, the unemployment rate is likely to increase. Otherwise, there will be a lot of questions since the number of claims is constantly climbing. Although the unemployment rate advanced in October, the number of claims continued to grow in November. That is why the unemployment data is likely to be below the forecast. However, yesterday, traders priced in such a possibility. In this light, the unemployment growth will hardly lead to the US dollar depreciation. At the same time, data on the US new jobs may cause a decline in the greenback if it is worse than expected.
US Unemployment Rate
The euro climbed above 1.0500 against the US dollar for the first time since June 2022. The current resistance level failed to stop the inertial movement, thus allowing buyers to alter the market sentiment.
On the four-hour chart, the RSI technical indicator is moving in the upper area of 50/70. There is no signal of the euro's overbought conditions on this time frame. On the daily chart, the indicator is also moving in the area of 50/70, which points to the bullish sentiment among traders.
On the four-hour and daily charts, the Alligator's MAs are headed upwards, which corresponds to the general traders' sentiment.
Under the current conditions, the price settlement above the control level of 1.0500 on the daily chart may lead to a further rise in the euro. This scenario may point to a mid-term change in the market sentiment.
The alternative scenario will become possible if the price settles below 1.0500 on the daily chart.
In terms of the complex indicator analysis, we see that in the short-term, intraday, and mid-term periods, indicators are pointing to the upward cycle.