Second estimates of the Q3 US GDP to be released today
The third quarter GDP estimates for the U.S. is due for release today with the median forecasts estimating a modest increase in the GDP print. In the initial estimates, the U.S. gross domestic product was seen rising 2.9% on an annualized basis. The second estimates are tipped to show an increase of 3.0% on an annualized basis.
While the annualized GDP is expected to rise 3.0% in the third quarter, up from 2.9% from the initial estimates, other data such as Core PCE is expected to remain unrevised at 1.7%
This is still below the Fed's 2.0% inflation target rate, but with a steady increase over the past months, inflation is expected to eventually rise to the fed's mandated inflation target rate. A match of the estimates could potentially see the U.S. dollar maintain its gains across the board.
USDJPY posted a bearish reversal yesterday after last Friday's doji pattern which came at the top end of a strong rally. Just shy of the 114.00 resistance level, a bullish beat on the U.S. GDP data could easily send USDJPY back higher and potentially test the 114.00 resistance level.
However, despite the short term bullish momentum in USDJPY there are clear signs that a correction is around the corner. Support is seen at 108.00 where USDJPY could be seeking to establish support ahead of further gains.
How to trade binary
USDJPY was weaker over the past two days but price is showing signs of a near term rally. Support is identified at 112.10 where minor support exists. Therefore, purchasing CALL options at 112.10 is ideal for a 21:00 GMT expiry period.
To the upside, resistance is seen at 112.75 - 112.80 region and breakout above here will see USDJPY push high to fill the gap from 26/11 at 113.10 region.
Target price: 112.10
Expiry: 21:00 GMT