- Details of the U.S. GDP report weigh on the buck.
- US Dollar Index reversed course ahead of 97.
After closing the previous day a couple of pips below the critical parity threshold, the USD/CHF pair started the day on a positive note and advanced to its highest level in more than three months at 1.0025. However, with the greenback struggling to preserve its momentum following the GDP report from the United States. As of writing, the pair was up 0.15% on the day at 1.0010.
The U.S. Bureau of Economic Analysis today announced that the first estimate of the third quarter real GDP growth eased to 3.5% from 4.2% seen in the second quarter. Even though this number beat the market consensus of 3.3%, the USD came under a selling pressure. The details of the report revealed that the underlying strength of the economy may have been misrepresented in the headline figure as inventories contributed 2.07% to the GDP growth, which was a -1.17% in the second quarter.
Commenting on the data, “The Fed projection materials from the September FOMC have 2018 GDP at 3.1%, up from 2.8% in June. With GDP at 3.23% for the first three quarters, that implies a 2.7% growth rate in the fourth quarter. Likely the economy will do better,” said Joseph Trevisani, FXStreet Senior Analyst. As of writing, the US Dollar Index was still up 0.15% on the day at 96.75.
In the absence of other macroeconomic data releases in the remainder of the session, the greenback’s market valuation is likely to stay as the sole driver of the pair’s price action.
Technical levels to consider
On the upside, the pair could face the first resistance at 1.0025 (daily high) ahead of 1.0070 (Jul. 13 high) and 1.0100 (psychological level). Supports, on the other hand, could be seen at 1.000 (parity), 0.9930 (20-DMA) and 0.9850 (Oct. 15 low).
Share
