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  • Q3 GDP growth estimate in US comes in line with expectations.
  • US Dollar Index turns positive on the day as it rises toward 97.50 post-data.
  • USD/JPY advances to new 2-week highs above 113.80.

After retreating to 113.70 area earlier in the day, the USD/JPY gained traction in the NA session and rose to its highest level since November 14 113.90. As of writing, the pair was trading a couple of pips below that high, adding 0.12% on a daily basis.

Although the initial market reaction to the GDP report from the United States was relatively subdued, the US Dollar Index started to edge higher in the last hour. According to the second estimate of the U.S. Burea of Economic Analysis, the third-quarter GDP growth estimate stayed unchanged at 3.5% to meet the market expectation and the previous estimate. Reviewing the publication,  “US economic growth in the third quarter confirmed at 3.5% was never the problem.  It’s the slope down to 2.5% in the fourth quarter and beyond that should worry the Fed. Whether rate increases are the cause is debatable but the governors do not want to be blamed for a return to the post-recession doldrums,” said Joseph Trevisani, a senior market analyst at FXStreet.

As markets turn their attention to the FOMC Chairman Powell’s speech at 1700 GMT, the US Dollar Index gains  0.08% on the day at 97.44. In the early trading hours of the Asian session, retail trade and foreign investment in Japanese bonds and stocks data will be looked upon for fresh impetus.

Technical levels to consider

The pair could face the initial resistance at 114.20 (Nov. 12 high) ahead of 114.55 (Oct. 3  high) and 115 (psychological level). On the downside, supports are located at 113.35 (20-DMA), 112.95 (50-DMA) and 112.25 (100-DMA).