US Dollar mixed against majors after the U.S. GDP contraction

By @ibtimes on

FXstreet.com (Barcelona) - The US Dollar appreciated somewhat against the Pound and lost ground against Euro and Yen, on the aftermath of historically weak GDP data in the United States.

The USD/JPY has dropped about 50 pips on the first hour after the news falling from 89.87 to 89.44. The GBP/USD dropped other 50 pips in the 30 minutes after the news but it managed to get them back afterwards, and the Pound aims now to resistance level at 1.43 76 and 1.4408, week-high on Jan 29.

Nevertheless, Nick Nasad, Analyst at CMS Forex, foresees some further depreciation on the GBP: GBP/USD: i think we should see a retest of 1.41 or 1.40., what happens there should decide where the pair goes, a retest of 1.35 is possible if we see a strong break of that support, though you would need weak UK fundamental data to come in to help push the Pound down to those low levels again.

The Euro, seems to have set a bottom at 1.28 on its drop from 1.3181, and the European currency has rallied 100 pips to levels around 1.29. The reason of that Euro-strengthening reaction, according to Nasad, has to do with a better than expected U.S. GDP depicting a not-as-gloomy-as-expected economic outlook: today's news was not met with a strong move in the pair but rather pretty choppy action. Personally, i think this data should leave us with a feeling of improved outlook on global growth and should help the eur/usd counter-rally from its recent decline.

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