Friday’s Forex Frenzy Amid Strong GDP Numbers

By Tomasz Wisniewski|

Published: October 27 2023, 05:06 GMT+0

Friday’s Forex Frenzy Amid Strong GDP Numbers

Good morning, traders. As we close out this bustling week, let’s zoom in on Thursday’s significant events and what Friday morning is hinting at.

Thursday continued the week’s trend of surpassing expectations with US GDP figures reporting an impressive 4.9% growth, outpacing the anticipated 4.5%. Durable good orders, too, stunned with a 4.7% rise against the 1.9% forecast. These robust economic indicators, while emblematic of a flourishing American economy, also suggest that there’s ample room for rate hikes. However, this has the potential to cast a shadow on stock performance, a paradox that has been evident this week.

While the dollar didn’t resonate too vibrantly with the GDP data, it saw some intriguing movements elsewhere. The USDJPY pair notably breached and held above the significant 150 psychological mark. Concurrently, the USDCHF has been on an upward trajectory over the past days, hinting at a reversal. By Friday morning, the Australian dollar took the lead, with the US dollar being the sole currency registering negative momentum.

Thursday wasn’t a banner day for indices. The S&P 500 retreated below the 38.2 Fibonacci level. Dow Jones is on tenterhooks as it grapples with the pivotal horizontal support at 32,850 points. The NASDAQ, on its end, succumbed to pressure and broke past two crucial supports. Over in Europe, the DAX is battling to hold its ground at the 38.2 Fibonacci, a significant determinant for its near-term trajectory.

Gold is shining close to its midterm peaks, marking another successful week. Its counterpart, silver, hasn’t been as gleaming, undergoing a correction phase. However, its fortunes might align with gold should the latter keep its upward march. Oil paints a contrasting picture, as both Brent and WTI teeter close to their respective weekly and monthly lows, holding at $88 and $84. Should these supports crumble, a robust sell signal might be in the offing.

Thursday heralded positive tidings from Amazon, posting numbers that beat the forecasts. As we transition into the day, keep an eye out for earnings reports from energy titans – ExxonMobil and Chevron, set to release their figures before the market opens.

Today’s calendar is relatively light. While Tokyo already unveiled an inflation rate of 2.7%, surpassing the 2.5% prediction, the day’s highlight will likely be the US’s Core PCE price index, projected at 0.3%. The Revised University of Michigan consumer sentiment will also be in focus, with expectations centering around 63.