- Summary:
- US GDP results post surprise to the upside, but US economy performs worse than previous quarter. USDJPY in muted rally as traders await FOMC.
The USDJPY extended gains made yesterday on the back of another positive report: the US GDP quarterly report. The US Quarterly GDP for Q2 2019 came in at 2.1%, which was better than the 1.8% that market analysts had predicted. The USDJPY spiked up to the 108.82 price level, but has quickly beaten a repeat. It must be noted that despite the positive result, the number was less than the 3.1% for the previous quarter.
In essence, the US economy has slowed but not as much as analysts had feared. The slowdown in the US economy is attributable to the continued US-China trade dispute, which continues to linger without a respite in sight.
Today’s macro data is the last for the week, and the focus of traders will shift firmly to the FOMC meeting next week, culminating in the Fed decision on Wednesday.
Technical Plays for USDJPY
The outlook for the USDJPY continues to remain bearish as expectations of an aggressive rate cut or series of cuts in 2019 continue to heighten. The positive Core Durable Goods and Q2 GDP reports have provided some respite for the pair, which may provide cheaper pricing opportunities for sellers.
USDJPY has been rejected at the 38.2% Fibonacci area, traced from the April 2019 swing high to the June 2019 swing low on the daily chart. Price action for the day is still evolving.Don’t miss a beat! Follow us on Twitter.