USD bullishness didn’t spill over to the USD/JPY – GDP to help?
On Friday, Forex traders will be focused on the new dataset covering the US economy for Q1/2019. In Q4 of last year, the US economy advanced at an annualized 2.2% on quarter, well below a 2.6% growth in the second estimate and compared to 3.4% in Q3/2018.
So, the question will be whether this trend of pessimistic readings continues, and how the USD will react. While we would usually expect the USD to drop in response to negative readings below expectations of 2.1%, after the USD index future instead broke out to new yearly highs, currently about to attack 98.00 points. Bullish momentum is probably only temporarily interrupted, but strong enough for a technical reversal.
That said, a reading above expectations could accelerate the move in the USD index future and result in a weekly close above 98.00 points.
Interestingly enough, the USDJPY wasn't really able to profit from the USD bullishness. We only saw a short spike above 112 to near-highs, but no follow through.
While a reading above expectations (> 2.1%) could certainly result in another attempt to sustainably break above 112.40 where further gains up to 114.50/115.00 become an option, a disappointing data set resulting in a stabilisation/corrective move in the USD could push the USD/JPY back towards 110.80/111.00 in the days to come.
So, the question will be whether this trend of pessimistic readings continues, and how the USD will react. While we would usually expect the USD to drop in response to negative readings below expectations of 2.1%, after the USD index future instead broke out to new yearly highs, currently about to attack 98.00 points. Bullish momentum is probably only temporarily interrupted, but strong enough for a technical reversal.
That said, a reading above expectations could accelerate the move in the USD index future and result in a weekly close above 98.00 points.
Interestingly enough, the USDJPY wasn't really able to profit from the USD bullishness. We only saw a short spike above 112 to near-highs, but no follow through.
While a reading above expectations (> 2.1%) could certainly result in another attempt to sustainably break above 112.40 where further gains up to 114.50/115.00 become an option, a disappointing data set resulting in a stabilisation/corrective move in the USD could push the USD/JPY back towards 110.80/111.00 in the days to come.
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