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US Data and USD/JPY (7/30)

Today, the main data point out of the US was the advanced Q2 GDP estimate, which came in at an annual rate of 2.3%. This was slightly lower than the average forecasts around 2.6%. The Q1 reading was revised down from a positive 0.2% print to -0.2%. This was an underwhelming and could come into consideration when FOMC decides whether it will raise rates by year-end. 

The USD/JPY was bullish after the latest FOMC statement yesterday (7/29). However, after the GDP data, and it appears to be stalling.

USD/JPY 4H Chart 7/30

(click to enlarge)

The 4H chart shows USD/JPY holding around the 124.50 resistance area. Indeed, the disappointing GDP data is keeping the pair from pushing to the 125.85 high on the year. In the very short-term, maybe we will get a pullback. However, if you see price hold above 124.00 at the end of this week, the USD/JPY is probably bullish and the 125.85 level should remain in play. Therefore, let's look for support in the 123.80-124.00 area if there is indeed a short-term bearish correction.