US jobless claims disappointed and rose to 429K, higher than around 415K that was expected. This just extends the losses of EUR/USD, that is quickly approaching a lower support line.
After a few good months when the number of unemployment claims was under 400K, they rose back and stabilized in a range between 410K to 430K. This rise towards the upper end of the range is very disappointing, and shows that the slowdown is here to stay. This goes hand in hand with the rise in the unemployment rate and the very disappointing Non-Farm Payrolls seen in May.
EUR/USD is now trading at around 1.4170, just above the support line of 1.4160. If this line is broken, further support is at 1.4030, followed by 1.3950. Resistance is at 1.4220, followed by 1.4282.
This extends the losses that began earlier, after a big hole was discovered in the fresh austerity plan of the Greek government. In addition, flash PMI figures from Europe were very disappointed and showed that Europe is slowing down faster than expected.
Fear dominates the markets: weak US figures just send the dollar higher. As the world, including the US is moving lower, the dollar is moving higher. This is classic risk averse trading, that returned with all its might.
For more on EUR/USD, see the EUR/USD forecast.
