Positive GDP Numbers Calm Recession Fears
Thu, Aug 28 2008, 13:24 GMT
by Andrei Pehar
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.
