US Unemployment Falls Further 2012.03.22

The United States (US) Department of Labor Thursday reported first time unemployment claims dropped 5,000 to a seasonally adjusted 348,000. Initial claims indicate the level of layoffs in the labor market. The four week initial claims moving average came in at 355,000, less 1,250 from the previous four week’s ending March 10th. Four week averaging reduces the volatile fluctuations that occur from week to week. Reductions in the number of those who receive unemployment insurance infer increased employment. The insured unemployment count in the week through March 10th stood at 3,352,000 less 9,000 from the previous week’s revised count. The reports provide support that the US labor market is strengthening.

In other news, Statistics Canada Thursday reported retails sales for the country increased 0.5% in January 2012 to $38.9 billion. Sales that excluded motor vehicles and parts lowered 0.5%.Yet, five of the 11 subsectors (52% of total retail sales) reported sales growth. More specifically, sales for motor vehicles and parts dealers increased 3.7%. General merchandise stores reported a 1.7% rise in sales with department stores gaining 2.1% in sales. Clothing and accessory stores increased sales 0.6%. On the other hand, building material and garden equipment and supplies dealers lost 4.00% in sales. As well, food and beverage retailers sold 0.9% fewer dollars in items. Electronics and appliance stores dropped 3.4% in sales. Gasoline station sales also declined 0.1% in January. Despite this, volume of the sales composite increased 0.3%.

The EURUSD tested key support at 1.3158 several times in the U.S. session but the pair failed to break it. For now Euro strength is holding despite the weak PMI report earlier today. If the pair breaks below 1.3158, we expect the pair to head towards support at 1.3086.

The USDCAD broke above key resistance at 0.9950 and traded briefly above 1.0000 by the end of the U.S. session. The next level of resistance is seen at 1.0026, which was the high established on March 7th. 

Eugene Ross, Analyst

Admiral Markets

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