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Session Recap: Artificial growth does not feed the USD

FXStreet (San Francisco) - Today's US GDP report was a perfect sample of how the trader's mind works: They initially read that the US grew by 3.5% in the third quarter, a better than expected figure; so they bought the USD. EUR/USD fell to 1.2550 and GBP/USD to 1.5950 while USD/JPY jumped to 109.35.

However, investors continued with the reading of the report and realized in the fine print there was too much government spending, like a 23% or 0.83 points of the growth of 3.5%, plus reduced consumption and core PCE. This is not the kind of sustainable growth that the market wants to see. So, they decided to sell the dollar with majors returning to previous levels.

The trader bought the headline and sold the fine print.

Finally, the EUR/USD closed negative for second day after bouncing off intraday lows of 1.2550 and finishing at 1.2610. "Renewed selling interest below 1.2580 should see the pair resuming the downside, eyeing a probable retest of the 1.2501 year low," Valeria Bednarik comments.

The GBP/USD fell for second day to 1.5950 but Cable managed to recover ground and close at 1.6000. To the downside, check the crossing down of the 50-hour MA level below the 200-hour MA around 1.6070 with CCI heading south.

USD/JPY rose for third day after breaking above 109.00 and trading as high as 109.45 before closing at 109.17. According to Bednarik, the Nikkei points for a strong opening, "which should also favor the upside in the pair."

Main headlines in the American session

United States Initial Jobless Claims came in at 287K, above forecasts (283K) in October 25

US Q3 GDP provisional qq +3.5% vs +3.0% exp

US personal consumption Q3 +1.8% vs +1.9% exp

Germany: Annual CPI steady at 0.8% in October

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