New York City, Yellow Taxis on Times Square. Image source: s4svisuals © 123RF.com
The woes for the weakened dollar, which was hit by a new dose of bearish pressure yesterday following FED's policy meeting, were exacerbated today after the release of the advance U.S. GDP numbers.
USDJPY 1H Price Chart. Image source: Trendsharks ©, created with TradingView.com
As can be seen on the hourly chart above, the USDJPY appears to be developing a new Double Top pattern just above the psychologically significant 23.6 per cent Fibonacci retracement level at 108.847. This entails growing bearish sentiment on the pair.
Double Tops are typically taken to signify likely new bearish reversals, which could drive the price action towards the next psychological target - the 38.2 per cent Fibonacci retracement level at 107.676.
The price action would first have to break down below the 20-day MA (in red) and the 50-day MA (in green), as the floating supports are currently converging towards the 23.6 per cent Fibonacci.
Despite rising bullish momentum in the short term, as underpinned by the MACD indicator, the price is likely to drop at least to the consolidation area spanning between the 108.200 support and the 108.350 resistance. The latter is underscored by the 100-day MA (in blue).
The U.S. economy grew slower than expected
According to the findings of the Bureau of Economic Analysis, the U.S. economy grew by 6.4 per cent in Q1, up from the 4.3 per cent expansion that was recorded over the previous period.
Advance GDP q/q Growth Rate. Image source: TradingEconomics.com
Nevertheless, the observed performance fell short of the initial market expectations, which were projecting a moderately bigger growth of 6.8 per cent over the three months leading to March.
The significance of today's data stems from the fact that advance GDP numbers represent the first released measure of economic expansion, being published before the "preliminary" and "final" numbers.
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