The U.S. Dollar is getting hit hard at the midsession. Traders are selling the Dollar after the government reported a lower than estimated decline in 2nd Quarter GDP.
The U.S. Dollar is getting hit hard at the midsession. Traders are selling the Dollar after the government reported a lower than estimated decline in 2nd Quarter GDP. Today’s number suggests that the U.S. economy is closer to a recovery. This is triggering greater demand for higher yielding, higher risk assets.
The GBP USD is the big gainer today. A spike through 1.6585 turned the main trend to up on the daily chart and triggered a breakout rally. Currently this currency pair is in a position to challenge the June high at 1.6743. In addition to the weaker U.S. GDP number, traders are anticipating a change in the Bank of England’s asset buyback policy.
Stronger appetite for risk also triggered a breakout rally in the EUR USD. For most of this week, this currency pair has been working on a possible weekly closing price reversal. Today’s rally has exceeded a key retracement zone and has also put this market higher for the week. The current upside momentum indicates that this market may be poised to test the high for the year at 1.4337 next week. The only negative would be a close under 1.4205.
Weaker equity markets and a report showing the U.S. economy contracted less than estimated is putting pressure on the USD JPY. This currency pair broke minor support at 94.95 to 94.72. Downside momentum is building which could threaten the uptrend if 94.01 is violated.
The USD CAD is testing the low for the week at 1.0748. Today’s strong rally in the Canadian Dollar is being triggered by signs of a recovery in the U.S. economy and slightly better crude oil. A late session rally in the equity markets is likely to trigger an even harder break in the USD CAD into the close.
Increased demand for higher yielding assets helped rally the AUD USD to a new high for the year. This move negated any talk of a possible weekly closing price reversal top.
Although the NZD USD has recovered nicely following yesterday’s sell-off, this market has not exceeded the high for the week and could still form a weekly reversal top with a close under .6554. Today’s upside reaction is to a better than expected U.S. GDP Report. Longer-term New Zealand Dollar traders may be focusing on bearish comments from the Reserve Bank of New Zealand which suggested the central bank is not through cutting interest rates. This may lead to a late session sell-off.