Economic news (15 March 2013) – The US dollar proved to be the highlight on the Forex market this week as it outperformed all of its major counterparts. Starting the trading week with a nearly three-year high, after US payrolls rose to 236,000 and the unemployment rate fell to 7.7%, the dollar continued its rally throughout the week and received another boost after the release of the US jobless claims yesterday. The report showed a significant decline in the jobless claims to 332,000 for the week ending 10 March, exceeding forecasts for a drop by 350,000. Following the data, the US dollar index touched a seven-month peak at 83.166.
However, the dollar slightly pulled back overnight and was trading mixed against the euro, the yen and the sterling. At the time of writing, the EUR/USD was trading at $1.3014, just above the 1.30 key mark, while the USD/JPY and the GBP/USD were hovering at 95.99JPY and $1.5120 respectively.
Analysts commented that the dollar might continue rising, especially against the euro, the yen and the pound on strong sings that the US economy is gaining momentum in its recovery against the other leading economies.
Despite the recent upbeat results from the US, market makers should be cautious in the optimistic sentiment as the fiscal issues are still not solved.
Looking further in the day, the session is packed with US data sets to be released. Investors will be watching closely the US Consumer price index and the Reuters/Michigan Consumer Sentiment index. The CPI is a key indicator to measure inflation, while the Preliminary Consumer sentiment index will reveal the first draft for the month of March on consumers’ willingness to spend money.
At yesterday’s session the euro gained ground from 1.2905 to 1.3025. This morning the currency pair was trading at 1.3005-1.3020.
Should the euro overcome the resistance zone at 1.3020-1.3040, its aim will be reaching and testing the zone at 1.3070-1.3100. If successful, the upward trend will continue to 1.3110-1.3130. If the euro falls below the support zone at 1.3005-1.2975, the next support zone is expected to be at 1.2955-1.2930 area. In case of a breakdown, the downward trend will continue to 1.2905-1.2880.
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