BRONX, NEW YORK/USA. Image source: Eddie Toro © 123RF.com
Earlier today, the US Department of Labour released its weekly labour force survey. The findings of the report revealed that another 1.314 million people have filed for unemployment benefits in the week ending the 4th of July.
The number measures a sizable drop from the 1.413 million that were recorded the week prior. Additionally, the latest data fell short of the consensus forecasts for 1.375 million.
US Unemployment Claims. Image source: TradingEconomics.com
Considering the latest data, the total number of people who have claimed unemployment benefits since the 21st of March has risen to 50 million. The hit on the labour market has been exacerbated by the coronavirus fallout, which continues to impact the way businesses in the US and elsewhere conduct their operations.
The likelihood of a second epidemic wave poses serious risks for the ongoing recovery process. The US Government could cease relaxing its containment restrictions in a bid to avert such a scenario, which would, unfortunately, impede the general economic activity as well.
If the number of newly confirmed cases continues to rise, which is currently happening in California and Texas, this could compel local authorities to reimpose more stringent lockdowns.
Such a course of action would undoubtedly jolt the political landscape in the US ahead of the upcoming November election, judging on the significant backlash that the initial lockdowns received from the Trump Administration.
A potential repeat of the situation would likely put Donald Trump at odds with local Governors once again, as the debate of whether more emphasis should be placed on healthcare or economics remains a hot button issue.
At any rate, a resurgence in the number of confirmed COVID-19 cases would threaten the tentative economic recovery, which is currently supported by the accommodative monetary and fiscal policies in the country.
Today's labour data could enhance the depreciation of the US dollar, which has been put under a lot of strain over the past several days. As can be seen on the hourly chart below, the greenback is presently struggling to recover against the euro.
The EURUSD is consolidating above the minor support level at 1.13300, and would likely attempt to test the strength of the major resistance level at 1.13750 in the near future.
That is so because the pair continues to advance within the boundaries of an ascending channel, whose upper boundary is currently converging with the aforementioned resistance.
The recent rebound of the price action from the 20-day MA (in purple) implies robust bullish commitment in the market.
EURUSD 1H Price Chart. Image source: Trendsharks ©, created with TradingView.com
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