The dollar index maintains firm tone and extends gains above 100 mark on Thursday. Shocking US data that showed initial jobless claims exploded to record 6.6 million in last week, heavily beating forecast for 3.5 million new claims and nearly doubling previous week’s surprising and upside revised 3.3 million result. The question is whether such numbers could be called shocking as headlines and news pointed to the scenario in which the US economy is going to be hit very badly, with current data probably being the top of the iceberg and labor sector one of the first being hurt. No surprise as America is getting paralyzed by coronavirus, with the highest number of infected people in the world, rising death toll and dark forecasts of over 200,000 deaths on coronavirus. In such situation the dollar ignores economic indicators and behaves on key market rule of demand and offer, proving as the ultimate safe-haven instrument. Fresh advance improved technical picture on daily chart as the price eventually broke above initial Fibo barrier at 99.62 (23.6% of 103.79/98.33) after three unsuccessful attempts and heading towards key Fibo level at 100.42 (38.2% retracement) reinforced by falling 10DMA (100.48). Bulls need close above here to generate strong signal for extension of the upleg from 98.33. North-heading daily RSI and stochastic, accompanied by MA’s in bullish configuration, underpin the advance, however, fading bullish momentum is evident and requires caution. Rising 20DMA (99.39) marks initial support which is required to hold and keep bulls intact.
Res: 100.42; 100.48; 101.02; 101.70
Sup: 100.00; 99.62; 99.39; 98.97
