Source: ForexYard
Typically US GDP is a high impact event in the foreign exchange market though tomorrow’s data may be overlooked given the tensions in Europe and the continued talk of QE3 by the Fed.
Today US core durable goods orders for the month of September climbed 1.7%, handily beating consensus forecasts of 0.5%. The better than expected result combined with this past month’s surprisingly positive NFP jobs report may help to shift investor expectations higher regarding tomorrow’s Q3 GDP report. Consensus forecasts are for 2.4% growth but perhaps the US economy is growing at a faster pace than forecasted?
Unfortunately, this data may be overshadowed by growing expectations for QE3 regardless of the growth data as unemployment levels remain elevated. This could keep pressure on the USD despite the tensions in Europe and today’s USD gains. A better than expected US GDP would also be positive for the “risk on” trade.
At print time the recent trend line rising from the October low remains intact with the EUR/USD failing to make a decisive break. A move below this line could find a bid at 1.3650 from where the October 18th low and the 20-day moving average converge.
Cable is down more than one cent today but yesterday’s current account numbers speak well for the UK economy. GBP/USD failed to move above its 100-day moving average which is just above the 50% Fibonacci retracement from the April to October decline but the pair has support at 1.5850 from the top of last week’s consolidation pattern. A deeper move could have sterling bulls lurking at 1.5780 from the rising support line off the October 12th low.
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