Japan GDP Disappointment, AUD Takes A Dive, Powell’s Testimony

Today, in the early hours of the Asian morning, Japan released its GDP figures, which was not what the country was hoping for. Australia’s employment change number came out well below zero. UK’s retail sales are in the spotlight, together with eurozone’s preliminary GDP figures. Today, Jerome Powel delivers his testimony to the House Budget Committee.

Japanese GDP and Australia’s Employment

During the early hours of the Asian morning we received Japanese GDP figures for Q3 on a QoQ and YoY basis. Although the numbers were already believed to come out lower than the previous ones, the actual readings were even lower. The QoQ figure came out +0.1%, against expected +0.2% and the previous adjusted +0.4%. But the YoY number was even worse, going from the previous +1.8% adjusted to only +0.2%, when the forecast was at +0.8%. Nikkei 225 took a deep dive and closed today’s trading session with a 0.76% loss. But the Japanese currency strengthened, as it once again confirmed its status of safe-haven currency and something that traders jump into when negativity hits the market. There could be a chance for the yen to gain a bit more, especially if the equity markets start feeling the heat.

Jerome Powel’s Testimony To Joint Economic Committee

Later in the day, the US releases its MoM and YoY PPI figures for October. We will keep an eye on the MoM Producer Price Index, which is believed to have improved from the previous -0.3% to +0.3%. About half an hour after the US opening bell, the head of the Federal Reserve, Jerome Powell, is set to deliver his testimony on the state of the economy before Congress, this time in front of the House Budget Committee.

AUD/NZD — Technical Outlook

After taking a strong hit yesterday, AUD/NZD continued drifting further down this morning as well. The pair found some decent support near the low of September 9th, at 1.0631, from which the rate could rebound slightly. But given the current weakness in AUD, the rebound may be short-lived and the selling might resume, hence why we will stay cautiously-bearish, at least for now.

GBP/JPY — Technical Outlook

Overall, GBP/JPY is still trading above its short-term tentative upside support line taken from the low of September 3rd. But, from around the end of October, the pair is struggling to get out of a range, which is roughly between the 139.36 and 140.75 levels. For now, we will remain neutral and wait for break through one of the sides of the range, before examining a further short-term directional move.

As for the rest of today’s events

Half an hour after the UK data release, the eurozone will deliver its preliminary GDP numbers for Q3 on a QoQ and YoY basis. Both figures are believed to have stayed the same, at +0.2% and +1.1% respectively.

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