The currency market is experiencing the aftershocks of the shutdown that ended two weeks ago. The 43-day suspension of the U.S. government has left its mark—even on the Bureau of Labor Statistics (BLS).

For instance, on Wednesday, BLS specialists were scheduled to publish the September core PCE index and the U.S. third-quarter preliminary GDP growth figures. Unfortunately, the announced reports were not released. The publication of the core personal consumption expenditure price index report has been postponed to December 5, and the preliminary data on U.S. third-quarter economic growth have been postponed to December 23. More precisely, the U.S. Bureau of Economic Analysis has canceled the preliminary GDP estimate for the third quarter; this time, only two assessments of this indicator will be made public.

It can't be said that the market is entirely "blind": for instance, on Tuesday, we learned the September PPI figure, retail sales data, and the November consumer confidence index from the Conference Board. Traders interpreted these releases favorably against the U.S. dollar, causing the EUR/USD pair to approach the 1.16 mark, updating the weekly price high. Still, the canceled publications could play a decisive role in the pair's fate—at least in the medium term. For example, if the core PCE index had come in above 2.9% YoY (that is, higher than the August level), and U.S. GDP had neared the 2% mark (instead of the expected growth of 1.6%), then market "dovish" expectations would have significantly weakened. In that case, the dollar would have been "back on top" with all the ensuing consequences (including for the EUR/USD pair).

Notice how emotionally the market reacted to the published weekly data on initial jobless claims in the U.S. The pair fell to the middle of the 1.15 range within minutes, even though Unemployment Claims is a secondary and quite volatile indicator.

However, the bears on EUR/USD could not sustain their success—the southward momentum waned almost as soon as it began. Buyers regained the initiative.

On one hand, the published figure does indeed show a downward trend: last week's initial claims dropped to 216,000, marking the lowest level since April of this year. But there are caveats.

The number of continuing claims increased by 7,000, reaching 1.96 million. The growth/stagnation of this indicator may suggest that many unemployed individuals are finding it harder to secure new jobs, or they are remaining unemployed for longer periods. Combined with other economic factors (declining consumer confidence, slowing consumer activity, weak retail sales growth, etc.), this could signal that the labor market is losing its dynamism—even if mass layoffs are not currently being announced.

Thus, a decrease in initial claims does not necessarily imply an improvement in the labor market; considering the dynamics of other macroeconomic indicators, it certainly does not imply that. The figure only records new layoffs and does not reflect hiring dynamics, which affect people's ability to find new work. At the same time, rising continuing claims indicate that already-laid-off employees are staying unemployed longer—meaning that employment is slowing. Furthermore, the decline in new claims may occur not due to strong demand for labor, but instead because companies have already preemptively reduced hiring—in other words, there's simply no one left to lay off. Collectively, this points more to a weakening of employment dynamics than to a recovery in the American labor market.

In this context, it is necessary to recall the latest ISM indexes that were published in the U.S. in early November. Specifically, the services sector business activity index remained in the expansion zone (52.4), but the structural component—the employment index—remained below the 50-point mark (48.2), signaling that hiring in the services sector remains weak. In turn, the ISM manufacturing index fell to 48.7, and the employment index in manufacturing dropped to 46.0.

Thus, despite the "green tint" of Unemployment Claims, the fundamental backdrop for the greenback remains negative. Dovish expectations of further Fed actions continue to strengthen (the probability of a rate cut at the December meeting has risen to 84%), and contradictory macroeconomic reports are interpreted unfavorably for the U.S. dollar. Therefore, price corrections in the EUR/USD pair should be viewed as opportunities to open long positions.

From a technical standpoint, the pair has overcome the 1.1550 resistance level (the middle line of the Bollinger Bands indicator on the D1 timeframe) and is now trying to settle above the intersecting lines of Tenkan-sen and Kijun-sen (1.1570) on this timeframe. On the four-hour chart, the pair has surpassed the upper boundary of the Kumo cloud and is positioned above all lines of the Ichimoku indicator, as well as between the middle and upper lines of the Bollinger Bands. These signals suggest a bullish priority. The first target for the upward move is 1.1600 (the upper line of Bollinger Bands on the H4 chart). The main target in the medium term is 1.1660 (the lower boundary of the Kumo cloud on the D1 timeframe).