US Preliminary GDP measures production and growth of the economy and is one of the most important economic indicators. The Preliminary GDP report is the second of three reports released each quarter. A reading which is stronger than the market forecast is bullish for the dollar.
Here are all the details, and 5 possible outcomes for USD/JPY.
Published on Friday at 12:30 GMT.
Indicator Background
US Final GDP is a key economic indicator, and provides an excellent indication of the health and direction of the US economy. Traders should pay particular attention to this economic indicator, as any unexpected reading could change the direction of USD/JPY.
Advanced GDP in Q2 posted a gain of 1.2%, well short of the estimate of 2.6%. The estimate for Preliminary GDP stands at 1.1%. Will the indicator match or beat this estimate?
Sentiments and levels
The Fed is very unlikely to raise rates in September, but there is a reasonable chance of a December move, so the markets will be listening for any hints about Fed monetary policy at the Jackson Hole conference. Japan will release key inflation data prior to the US GDP release, which could move the pair. So, the overall sentiment is neutral on USD/JPY towards this release.
Technical levels, from top to bottom: 104.25, 102.80, 101.51, 99.88, 98.95, and 97.61
5 Scenarios
- Within expectations: 0.8% to 1.4%. In such a scenario, USD/JPY is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 1.5% to 1.9%: An unexpected higher reading can push the pair above one resistance line.
- Well above expectations: Above 1.9%: A surge in GDP would likely push the pair higher, and a second line of resistance might be broken as a result.
- Below expectations: 0.3% to 0.7%: A lower GDP figure than predicted could cause the pair to fall below one support level.
- Well below expectations: Below 0.3%. A weak reading could hurt the dollar, and USD/JPY could break a second level of support.
For more on the yen, see the USD/JPY forecast.
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