Forex Traders Await U.S. GDP Report

The Dollar is trading slightly better as traders await this morning’s U.S. 3rd Quarter GDP Report.

The Dollar is trading slightly better as traders await this morning’s U.S. 3rd Quarter GDP Report. The report is expected to show a decrease from the previous estimate. Previously the report showed an increase of 3.5% which some economists thought was too high. Today’s report is expected to show growth of 2.8%. A wider trade gap and weak retail sales are expected to weigh on GDP performance.

The Forex markets are reversing yesterday’s gains. Risk aversion seems to be back in the market as higher yielding assets are feeling downside pressure. Thin volume in this holiday shortened weak is contributing to the weakness in foreign currencies along with liquidation ahead of the U.S. Thanksgiving holiday.

The EUR USD is trading slightly better while the Dollar is strengthening versus all others. The Euro is up because German business confidence increased more than economists forecast to a 15-month high in November.

This report suggests that the German economy may start to show some solid gains next year. Manufacturers are replenishing inventories and exports are expanding. This is good news because many investors thought the Euro Zone exports would show a decline after the rise to $1.5000 in the Euro. All of this news points toward expansion during the fourth quarter.

Skeptics still believe the economy is poised to weaken further. They attribute the gains in the economy to government stimulus. Many think the economy will falter once stimulus measures are removed. They cite the possibility of weaker consumer spending and slower exports as the main reasons why the economy will struggle in the future. The main reason for the decline in exports will be the high priced Euro.

Traders could be facing a choppy, two-side trade today ahead of the U.S. holiday. Volatility may be muted once the U.S. GDP Report is released.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More