The US 2nd quarter GDP revision came in better than expected, but it isn’t the data you need to be watching this week. While it is good, and points to steady gains in inflation, the GDP data is rear looking and will have little long-term effect on markets. The data you need to watch will be Thursday’s read on Personal Income & Spending, a more current read on the economy including the FOMC’s favored PCE Price Index.
US GDP was revised up by a tenth to 4.2% in the 2nd quarter. This is up a tenth from the previous estimate and up 0.2% from the consensus expectation. The strength is due to increases in investment and inventory but were offset by a small decline in personal consumption. Personal consumption edged down a hair but remains strong and driving prices higher. The 2nd quarter GDP PCE Price Index edged up a tenth to 1.9%, ordinarily a bullish signal for the dollar, but that was expected and consistent with last month’s read on the core PCE.
The reason why tomorrow’s PCE Price Index release is so important, other than being a current read on inflation, is because of Jerome Powell’s comments last week. The Fed chief has led the market to believe a slower pace of rate hikes may be at hand and traders will be looking to find confirmation of that in the data. Economists are estimating PCE prices will move up a tenth to 2.0% annually, anything less will be bearish for the dollar.
The EUR/USD had been trading lower in the early Wednesday session but found support following the release of the GDP revision. The pair is testing for support at the now-broken resistance line of 1.16675 and may move sideways overnight and into Thursday morning. The indicators remains bullish but show signs of topping that may lead to reversal if tomorrow’s data is hotter than expected. A move down may find support at 1.16250 or just below that at the short-term moving average. A move up, supported by the data, will be bullish for the pair and could take it up past 1.1800.
The USD has reasserted itself versus the Mexican peso and looks like it could make a significant move higher. The pair gained about 0.50% in early Wednesday trading and is supported by a strong bullish crossover in the indicators.
A move up would be bullish and in line with the new trend, if it moves above resistance at 19.40 a move up to 20.00 is very likely.
3 min
Table of contents
MOST TRADED ASSETS
- Binary Options
- Digital Options
- Forex
- Stocks
- Indices
- Commodities
- ETFs
-
EUR/USD
1.04
Trade-0.34% -
USD/JPY
157.16
Trade+0.38% -
GBP/USD
1.25
Trade-0.42% -
AUD/USD
0.62
Trade-0.13% -
GBP/JPY
196.69
Trade-0.04%
-
Shopify Inc.
109.69
Trade+1.68% -
Microsoft Corporation
434.78
Trade-0.42% -
Tesla, Inc.
431.4
Trade+1.88% -
NVIDIA Corporation
138.47
Trade+1.65% -
Coinbase Global, Inc.
268.22
Trade-2.02%
-
Gold
2611.21
Trade-0.49% -
Crude Oil WTI
68.97
Trade-1.03% -
Crude Oil Brent
72.07
Trade-1.14% -
Silver
29.64
Trade-0.03% -
Natural Gas
3.3
Trade-4.69%
-
US 100
21417.48
Trade+0.06% -
US 30
42787.74
Trade-0.6% -
US 500
5957.6
Trade-0.18% -
GER 30
19875.45
Trade-0.18% -
US 2000
2237.09
Trade-1.07%
-
UltraPro Short QQQ
29.32
Trade-0.64% -
S&P 500 ETF
592.71
Trade+0.14% -
20+ Year Treasury Bond ETF
87.64
Trade-0.6% -
Daily Junior Gold Miners Index
37.49
Trade-0.17% -
Gold Miners ETF
34.31
Trade+0.33%
Your capital might be at risk
Related posts
Short Selling: How to Trade Forex in a Downward Market
Top 20 Most Valued Currencies In The World (And Why They’re Worth So Much)
Forex Technical Analysis: Does It Work?
5 Forex Pairs to Watch in 2024
Forex Trading on IQ Option
3 Popular Forex Trading Strategies
How to Make Sense of the Economic Calendar? Step-by-Step
Best Technical Indicators for Forex Trading
What should you learn next? Turn the wheel to find out!
