When is the US Weekly Initial Jobless Claims report and how could it affect EUR/USD?

Initial Jobless Claims Overview

Thursday's US economic docket features the release of Weekly Initial Jobless Claims, scheduled later during the early North American session at 12:30 GMT. The number of people claiming unemployment-related benefits for the first time is expected to drop from 353K to 345K during the week ended August 27. Continuing Claims are expected to fall further to 2.775 million from 2.862 million in the previous week.

How could it affect EUR/USD?

Against the backdrop of Wednesday's disappointing ADP report on private-sector employment, any unexpected rise in the initial claims will further raise doubts about the US labour market recovery. This will reaffirm market speculations that the Fed will wait for a longer period before scaling back its pandemic-era stimulus and weigh on the already weaker US dollar.

Conversely, the market reaction to a larger than expected drop is more likely to be muted as investors might wait for a confirmation from Friday's official monthly jobs report. This, in turn, suggests that the path of least resistance for the greenback is down and up for the EUR/USD pair.

Meanwhile, Yohay Elam, FXStreet's own analyst, outlined important technical levels to trade the EUR/USD pair: “Resistance is at the fresh September high of 1.1860, a level that also held the pair back in early August. The next noteworthy cap is only at 1.1910, which was July's high point. Further above, 1.1945 and 1.1975 are eyed. Support is at 1.1830, which provided support a month ago, followed by 1.1810 and 1.1780.”

Key Notes:

   •  EUR/USD Forecast: Next stop, 1.1910? Trio of bullish factors shows points to fresh gains

   •  EUR/USD to soar towards the 1.20 level in the coming weeks – SocGen

About Initial Jobless Claims

The Initial Jobless Claims released by the US Department of Labor is a measure of the number of people filing first-time claims for state unemployment insurance. In other words, it provides a measure of strength in the labor market. A larger than expected number indicates weakness in this market which influences the strength and direction of the US economy. Generally speaking, a decreasing number should be taken as positive or bullish for the USD.