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The dollar went down sharply on Thursday. Correctional moods still prevailed, besides, macrostatistics played a role.
Reports on the labor market are ambiguous, weekly data indicate a further drop in the number of repeated applications for benefits to 1,317,000. A new low has been recorded since the end of 1969, when the population of the US was 40% less than at present.
At the same time, the number of initial applications for benefits amounted to 218,000, which is slightly higher than the expected 200,000. A week earlier, the value of the indicator was at the level of 197,000. It seems that there is a tendency to increase. On average, the number of applications for four weeks increased to 199,500 from 191,250 a week earlier.
The market reacted to the new statistics, although the reaction was more to the pessimistic production report of the Philadelphia Federal Reserve.
The report in May was much weaker than expected. The indicator fell to 2.6 from the previous 17.6. Meanwhile, the markets expected a slight dip down to 16.
Business conditions worsened to 2.5 from 8.2, capital expenditures – to 9.6 from 19.9. Employment sank to 25.5 from 41.4.
The dollar index initially fell to a session low around the mark of 103.20. It was not possible to keep this level, then the US currency went down like a stone, losing more than 1% for the day. What to expect next from the indicator?
The greenback's movement in recent sessions has already been ambiguous, on Wednesday it experienced some support from the hawkish comments of the head of the Federal Reserve, but the positive was uncertain, rather restrained.
Despite the rebound on Wednesday, further pullbacks remain inevitable, today's movement is proof of that. Bears are able to roll the dollar to the next support near the lows of May 5 – 102.35. Then there will be a pause, at this point the fall is likely to stall.
In contrast to the dollar, there is an improvement in sentiment on Wall Street. Key indicators began to show signs of life after a deep fall the day before. The euro also revived, breaking up the 1.0600 mark. If a trader keeps the EUR/USD quote above the 6th figure, we will talk about a more stable recovery.
The bulls' next target is at the May high of 1.0641. Above the next strong barrier is the value of 1.0750, reaching it is still a big question.
A retreat below 1.0545 will soften the bullish momentum in the pair. Next, attention will be focused again on 1.0480, and then on 1.0455.
The main trend in the EUR/USD pair remains bearish, but a steady recovery above 1.0650 may indicate the formation of an intermediate bottom.
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