Good data on the US economy that was released on Thursday afternoon, supported the US dollar.
According to a report by the US Department of Labor, the number of Americans who applied for unemployment benefits last week fell significantly.
Thus, the number of initial applications for unemployment benefits for the week from 20 to 26 of May fell by 13,000 and amounted to 221,000. Economists had expected the number of applications to be at 225,000. Data for the previous week were not revised and remained unchanged at 234,000.
A number of representatives of the Federal Reserve have repeatedly noted that the US labor market is in order and unemployment has reached its historical minimums, which will allow the regulator to continue to grow without problems in the future. Such data also make it possible to expect an increase in interest rates, which is still hampered only because of the conditions of weak inflation.
It is important to note that there will be a very important report on unemployment in the US today, which should remain at 3.9%, as well as data on the change in the number of employed in the non-agricultural sector, which is expected to grow by 189,000 in May this year.
The growth of the US dollar also reacted to the report, which indicated that Americans continued to increase their spending in April this year, which is directly related to their incomes, as well as confidence in the economy.
According to the US Department of Commerce, personal expenses in April rose by 0.6% compared to the previous month and personal income before taxes showed a monthly increase of 0.3%. Economists predicted an increase in expenses by 0.4%, and revenues by 0.3% compared to the previous month.
The speech of the representative of the Federal Reserve System, Lael Brainard, did not have a significant impact on the markets. According to Brainard, a gradual increase in rates is appropriate in light of the favorable labor market situation, rising inflation, and fiscal stimulus. Also gradual rate increases will help support the labor market and inflation.
The representative of the Federal Reserve expressed concern about the political crisis in Italy, as well as in trade relations that carry certain risks. In this regard, Lael Brainard believes that the course of monetary policy in developed countries is likely to be different.
In general, there is nothing new that the representatives of the Federal Reserve said, only repeated the previous statements of her colleagues.
As for the current technical picture of the EURUSD pair, only a confident break above the resistance level of 1.1720 will form a new wave of growth, which will lead to a new weekly high in the areas of 1.1780 and 1.1830. If the trade again moves to the area of support at 1.1650, then the pressure on risky assets will increase substantially, which will scare off a number of buyers and lead to a decrease in the areas of 1.1590 and 1.1540.