By the end of the last trading week, expectations for the growth of the labor market increased, as data on initial jobless claims decreased more than by 100,000 reaching 730,000. However, in February this was a single positive case. Prior to that, for two weeks in a row, the Department of Labor published data where the numbers exceeded 840,000, which is higher than the average for the last three months.
A leading indicator such as the change in employment in the private sector, published by ADP, didn’t show positive results on Wednesday. The US business entity hired 117,000 employees in February 2021, well below market forecasts for growth to 177,000 according to the company information. 131,000 workplaces were created in the service sector, most of which were created in trade, transportation, and public services. The information sector lost 3,000 workplaces, the manufacturing sector - 14 000.
Another major release is the ISM Service Sector data which demonstrated a slowdown. Even though the inflation sub-index indicated a significant acceleration in growth to 71.8, the highest since 2008, the main indicator fell to a 9-month low. The ISM Service Sector Employment Index slowed down to 52.7 from 55.2, which is adding some negative expectations.
"The labor market continues to show a sluggish recovery across the board," ADP chief economist Nela Richardson mentioned in a statement. "We can observe that the large are experiencing the negative impact of Covid-19, while workplaces growth in the manufacturing sector is suspended."
Economists’ polls show an average median of the forecast to 183,000. But even if the forecast is confirmed, the numbers will be below the average expected quarterly rate of 200,000.
- Support levels: 90.44, 90.09
- Resistance levels: 91.36, 92.77
As a result of the positive statistics from the previous week, the dollar index is growing. The technical picture indicates a stable correction on the H4 and H1 timeframes. USDX has consolidated above the moving averages. The ADX shows the strength of bullish pressure just below average. If positive data is released (higher than expected), the index may continue to rise to the first resistance level. In case of consolidation above 91.36, there will be a signal for a dollar reversal in the north direction in the long term.
This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.Open Account