Futures pare gains as the government releases worst jobless claims data
April 2, 2020
Posted by: Analysis Team
Category: FOREX, Technical Analysis
The price of crude oil jumped today as the markets reacted to some positive signals from the US. In a statement, Donald Trump said, without providing evidence, that Saudi Arabia and Russia were close to a deal. The statement came after Vladimir Putin called for action on the “challenging” energy market. The market also reacted to news that China was aggressively ramping up its oil reserves as it tries to take advantage of historically low oil prices. Still, the sector is going through increasing challenges, as the market reacts to increased supplies. In a report yesterday, the Wall Street Journal said that many full oil tankers had docked because of a lack of demand.
The dollar strengthened after the Labour Department released another record number. The data showed that more than 6.6 million Americans filed for unemployment benefits in March. This was the highest number ever reported and it represents more than 2% of the entire country. The number was higher than the record number of 3.2 million that was reported last week. It was also higher than the expected 3.5 million. Meanwhile, other data from Challenger showed that more than 200k Americans were axed last week. This was the highest number ever read since the last financial crisis.
Global stocks bounced back today as the markets cheered rising oil prices. In Europe, the energy sector was the best-performing sector as companies like Royal Dutch Shell and BP rose. In Germany, the DAX index rose by 30 basis points while in France, the CAC 40 index rose by 80 basis points. In the EU, the Stoxx index rose by 40 basis points. Meanwhile, in the US, futures tied to the Dow and S&P500 bounced back by more than 1%. They then pared back those gains after the weak jobless claims data. Part of the reason for the bounce is that Donald Trump has been talking about another stimulus round. He has supported a $2 trillion infrastructure package that faces some resistance from the Republican party.
The EUR/CHF pair dropped to an intraday low of 1.0550, which was significantly lower than the day’s high of 1.0593. On the hourly chart, this price is slightly below the 28-day and 14-day exponential moving averages. The price is slightly below the 38.2% Fibonacci Retracement level on the hourly chart. The ATR and RSI have been falling too. The pair could continue moving in a downward trend that was started a few days ago.
The XBR/USD pair rose to an intraday high of 28.45 as the market cheered the latest action in the sector. Looking at the 30-minute chart, we see that the pair is slightly above the 14-day and 28-day exponential moving averages while the signal and histogram of the MACD have continued to rise. Meanwhile, the RSI, has started moving downwards after reaching an overbought level of 70. The pair may continue being volatile as more news come in.
The EUR/USD pair edged downwards after the weak jobless claims data. On the hourly chart, the pair has formed a head and shoulder pattern and is now trading below the right neckline. The price is below the short and longer-term moving averages and is between the 50% and 38.2% Fibonacci Retracement levels. The pair may continue edging lower ahead of the official employment data tomorrow.