U.S. Indices Open In The Green, GDP Underperforms

Posted Wednesday, May 30, 2018 by
Shain Vernier • 1 min read

This morning’s U.S. equities open has proceeded on a much more positive note than yesterday. About an hour into the Wall Street trading session, both indices are in firmly in the green. Uncertainties over a pending Italian election and the impact of institutional money being reintroduced into the market after the holiday have subsided for the moment.

U.S. GDP Disappoints

The release of the U.S. GDP report and consumption statistics highlighted the pre-cash open for American equities:

Event                                                                 Actual       Projected

Core Personal Consumption (QoQ, Q1)           2.3%               2.5%

GDP (Q1, Annualized)                                         2.2%               2.3%

GDP Price Index (Q1)                                          1.9%              2.0%

The consumption and GDP metrics came in below expectations, surprising the industry consensus. Fallout has been considerable, with the Greenback falling against the Euro, Swiss franc, and Canadian dollar. Gains against the Japanese yen and Australian dollar have tempered the session for USD bulls.

USD/CHF Technicals

Safe-havens are up moderately on the day, led by gains in gold and the Swiss franc. In Tuesday’s session, the USD/CHF tested a key area of downside support.

USD/CHF, Daily Chart

Tuesday’s sell-off in the Swissie tested the 38% Fibonacci retracement of the current bull run. An established daily low at .9850 is set up as a possible intermediate-term low.

Here are a few levels to watch for the USD/CHF:

  • Resistance(1): Bollinger MP, .9968
  • Support(1): 38% Current Wave Retracement, .9873
  • Support(2): Swing Low, .9850

Overview: It looks as though the Swissie has settled into consolidation after yesterday’s active session. Although it took some severe heat, the 38% Fibonacci level has withstood numerous tests. If it holds up throughout today’s session, a short from topside resistance may come into play on Thursday.

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