The economic data this week hasn´t been of any particular importance, especially the numbers coming from the US. Although today the US GDP report is likely to shake the market.
The durable goods orders report will be released together with that and the US consumer will come about an hour later and they are likely to have some impact on the market as well – but the GDP report is the elephant in the room today.
So, what do we expect from this report?
Well, we know that the US economy usually slows down during winter and we have seen it relax a bit during this period, which is portrayed by the GDP expectations. In the last quarter of 2016, the US GDP grew by 1.9% on an annual basis, while this quarter is expected around 0.9%.
That´s quite a big slash from the previous quarter, but the question is whether the actual numbers will deviate from expectations.
This is the second GDP estimate in fact; the first reading was 0.7% while now it is expected to be revised higher to 0.9%. That´s still a weak GDP number, but my opinion is that if the actual number comes above 1% then this might be the start of the reverse for the Buck.
The market is already feeling nervous and we can feel that by watching the USD/JPY chart which dived about 100 pips since last evening. As I said, I will try to buy the USD if the US GDP comes above 1%. USD/JPY would be the favourite, although I would like to see a quick dip to 110 or 10.50 before the release before going long, we don´t know how the price action will be like, so I´ll be watching the market closely.
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