Positive GDP Numbers Calm Recession Fears
Posted 08-28-2008 at 02:26 PM by fxKnight.com
by Andrei Pehar - fxKnight.com
US preliminary GDP came in at 3.3% today, for the moment calming fears of a full-blown recession among investors. Analysts had been projecting a figure of 2.6%, and the prior quarter was also revised up to 1.9%.
Adding to the bullish mood on Wall St. today was the drop of 7000 unemployment claims since last month to 425,000; however according to the US Department of Labor any figure above 400K is still considered to indicate a contracting economy.
While we've seen some Dollar strength both today and in the days leading up to it, on the EUR/USD pair specifically we find ourselves at a rather critical level - and which side of 1.4772 we end up trading on may well help determine future direction.
Initially, there should be a break to the downside, taking us down to test support at 1.4725, and if that breaks then 1.4695
A bounce back up will likely see us test the prior high at 1.4808, and if price manages to get above that level then targets at 1.4826, 1.4849, and perhaps ultimately 1.4896 come into view.
A big key to which direction the Dollar moves next will come from how oil prices react to hurricane Gustav, which is expected to hit the Gulf of Mexico late Monday or early Tuesday morning, with winds of at least 131 miles per hour.
US preliminary GDP came in at 3.3% today, for the moment calming fears of a full-blown recession among investors. Analysts had been projecting a figure of 2.6%, and the prior quarter was also revised up to 1.9%.
Adding to the bullish mood on Wall St. today was the drop of 7000 unemployment claims since last month to 425,000; however according to the US Department of Labor any figure above 400K is still considered to indicate a contracting economy.
While we've seen some Dollar strength both today and in the days leading up to it, on the EUR/USD pair specifically we find ourselves at a rather critical level - and which side of 1.4772 we end up trading on may well help determine future direction.
Initially, there should be a break to the downside, taking us down to test support at 1.4725, and if that breaks then 1.4695
A bounce back up will likely see us test the prior high at 1.4808, and if price manages to get above that level then targets at 1.4826, 1.4849, and perhaps ultimately 1.4896 come into view.
A big key to which direction the Dollar moves next will come from how oil prices react to hurricane Gustav, which is expected to hit the Gulf of Mexico late Monday or early Tuesday morning, with winds of at least 131 miles per hour.
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Andrei Pehar, Sr. Currency Strategist, fxKnight.com
Andrei is a private fund manager, consultant to management, and a sought-after speaker and coach for professional traders and individual investors alike. At a young age he was already playing in professional chess tournaments, and went on to further hone his strategic skills through years spent studying Japanese martial arts. From both worlds, he brings with him a unique perspective to the financial markets.
His client list includes prestigious names such as UBS, Tower Asset Management (named by Bloomberg as top asset manager), Clifford Associates (investment counselors since 1915, officially acknowledged as the oldest in the United States), and several other high profile firms specializing in investment and wealth management for musical artists, sports celebrities, and other ultra high net worth individuals and trusts.
Andrei is a regular contributor to BabyPips, DailyFX, and FXStreet. He is currently working on a book which will, for the first time, introduce retail traders to institutional trading strategies and techniques. His site fxKnight.com provides free tools and strategies for professional traders and individual investors (including live chat, strategy forums, training videos, worldwide market news, and streaming ForexTV).
Click Here to view videos by fxKnight
Andrei is a private fund manager, consultant to management, and a sought-after speaker and coach for professional traders and individual investors alike. At a young age he was already playing in professional chess tournaments, and went on to further hone his strategic skills through years spent studying Japanese martial arts. From both worlds, he brings with him a unique perspective to the financial markets.
His client list includes prestigious names such as UBS, Tower Asset Management (named by Bloomberg as top asset manager), Clifford Associates (investment counselors since 1915, officially acknowledged as the oldest in the United States), and several other high profile firms specializing in investment and wealth management for musical artists, sports celebrities, and other ultra high net worth individuals and trusts.
Andrei is a regular contributor to BabyPips, DailyFX, and FXStreet. He is currently working on a book which will, for the first time, introduce retail traders to institutional trading strategies and techniques. His site fxKnight.com provides free tools and strategies for professional traders and individual investors (including live chat, strategy forums, training videos, worldwide market news, and streaming ForexTV).
Click Here to view videos by fxKnight
