The highly anticipated second estimate of the US first quarter 2015 GDP released on Friday turned out to be a non-event as anticipated in the report titled “Trading the US GDP report†published on 28th May, 2015. The report outlined three possible scenarios along with the anticipated movement in the USD. The actual print (-0.7%) was slightly higher than the expected print of (-0.9%). Anything between -0.9% to 0.0% was mentioned in the report as likely to be met with a lackluster reaction. The USD was expected to witness moderate correction on the back of month end unwinding of long positions.
USD/JPY rises to June 2007 high
The report titled “USD/JPY Forecast: Will it fail to rise above 122.00 for the third time in seven months?†published on 25th May outlined the possibility and the failure of the pair breaking above 122.00 levels. The report clearly mentioned that a daily close above 122.00 would open doors for 124.12 (June 2007 high), erroneously printed as Nov 2007 in the report. The technical logic worked well, as the pair closed above 122.00 and eventually rose to 124.12. The report also mentioned some of the factors that could have supported the Yen like a potential weak US durable goods report and rise in Yen amid Greek uncertainty. However, core durable orders printed strong, while Greece issue did not lead to a rally in any of the major safe haven assets like Gold, Treasuries or Yen. Nevertheless, the technical pointers in the report were efficient in calling out the upmove.
GBP/JPY drops to 118.52
The report titled “GBP/JPY – Failure to rise above 190.00 could trigger a correction to 186.44†talked about the pair falling to 186.44 (23.6% Fib R of 174.86-190.00) in case the pair failed to witness a daily close above 190.00. The pair did clock a high above 190.50, although the daily close was below the mentioned level of 190.00. Consequently, the selling pressure persisted and the pair printed a low of 118.52 levels today. At the moment, the bearish target of 186.44 remains intact and once again a daily close above 190.00 should be viewed as a confirmation of change in the short-term outlook.CAD/JPY view likely to play out in days ahead
The report on USD/CAD titled “CAD/JPY appears weak ahead of OPEC meeting†published on 26th May called for a drop in the CAD/JPY cross to 98.31 levels on the back of weak Crude prices and pending correction in the USD/JPY pair. The view is still on and is likely to playout in this week.
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