- Q2 GDP growth improves to 4.1% in the first estimate from 2.2%.
- A less-than-expected increase in PCE prices weighs on the greenback.
- Wall Street starts the day mixed.
The USD/CHF pair touched its highest level in a week at 0.9977 during the European trading hours but failed to push higher as the greenback came under a modest selling pressure following the Q2 GDP data. As of writing, the pair was trading at 0.9955, still up 0.12% on the day.
The data released by the Bureau of Economic Analysis showed that the first estimate of the Q3 real GDP growth rose to 4.1% from 2.2% in the previous quarter to meet the markets’ expectations. However, the core PCE prices eased to 2% from 2.2% to offset the positive impact of the GDP reading. The US Dollar Index, which came within a touching distance of the 95 mark earlier today, lost its traction and turned negative near the 94.70 handle.
In the meantime, major equity indexes in the United States started the day in a mixed manner with the Dow Jones Industrial Average sticking to small gains and the S&P 500 losing around 0.25% to reflect the lack of risk appetite.
Although the latest data from the United States showed that the University of Michigan’s Consumer Sentiment Index rose to 97.9 in July’s final reading from 97.1 in the previous estimate, the US Dollar Index failed to stage a recovery.
Technical outlook
The pair could encounter the first support at 0.9920 (50-DMA) ahead of 0.9880 (100-DMA) and 0.9820 (Jun. 14 low). On the upside, resistances align at 0.9975 (daily high), 1.0000 (psychological level) and 1.0065 (Jul. 13 high).
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