Look out traders! On Thursday the 29rd of April, the US will be printing their quarterly advance GDP so here's what to expect...
A Gross Domestic Product (GDP) report is a measure of the size and health of a country's economy over a period of time. The figure sums up the country's performance in terms of trade, consumer activity, government spending and investment during a particular period.
What's "Advance" you may be asking? The GDP is printed on a quarterly basis in three versions; advance, preliminary and final. The advance version is the first among these and usually tends to be the most exciting to watch and potentially trade.
The 4.0% economy increase in Q4 2020 wasn't too bad after the 33.4% jump in Q3, considering that lockdown restrictions were reintroduced in some states nearing the end of the year.
The -3.5% annualised growth marked the first decline since 2009 and the sharpest fall since 1946. However, traders weren't too worried as the stimulus checks, consumer activity, and vaccination rates hinted at a strong recovery in 2021.
The US is making a strong effort to get back on track from the damage caused by the pandemic. Essentially, the increased vaccination rates, eased lockdown restrictions and January stimulus checks are expected to boost the US economy's growth in this first quarter of 2021.
The GDP is based on economic activity and consumer spending, and now that businesses have reopened, there are more vaccinated consumers outside enjoying the better weather, which likely has projected consumer spending for the GDP rate.
If the data comes out as forecasted or even better than expected, this will cause huge strength in the USD. It's a sign that the US is doing well and therefore strength in the USD will occur.
It's likely we could see price bounce off this bearish OB at around 1800 right before the release, and then we could see price head back to the significant 1765 level.
Look out for the data first, do not blindly go short!
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