In a previous article, we suggested that unemployment has become a crucial series to watch. To clarify, we acknowledge that the series always bears watching. Still, in our view, it is the critical indicator that will determine the harshness of the proverbial soft- or hard-landing, given the current macro-variables driving the economy.
Yesterday, initial jobless claims came in higher than expected at 229K (205K forecast). This miss has resulted in the series's stochastic moving into its upper quintile (blue arrow). Moreover, initial claims are above their 3-month moving average (red ellipse). If the stochastic maintains its current position, upwards momentum will be underlying the series. This thrust won't bode well for the soft-landing scenario.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.