USD/JPY quickly retreats from the post-US GDP swing high to 2-1/2 week tops

• The US economic growth stood at 2.1% annualized pace during Q2 2019.
• The USD remains well supported near multi-week tops post-US GDP report.
• Investors seemed reluctant ahead of next week’s key central bank meetings – BoJ and the Fed.

The USD/JPY pair spiked to fresh 2-1/2 week tops, around the 108.85 region in reaction to upbeat US GDP report, albeit lacked any strong follow-through.

The US Dollar picked up the pace after the advance US GDP print showed a stronger-than-expected growth during the second quarter of 2019, at 2.1% annualized pace as against an expected deceleration to 1.8%.

The GDP price index also bettered consensus estimates and came in at 2.4% vs. 1.9% expected, which coupled with a sudden pickup in the US Treasury bond yields provided a modest boost to the greenback and the major.

Meanwhile, some renewed optimism over a possible resolution to the prolonged US-China trade dispute undermined the Japanese Yen's safe-haven demand and remained supportive, albeit bulls lacked any strong conviction.

With Friday’s key US macro data out of the way, the focus now shifts to next week's key central bank meetings - starting with the BoJ policy update on Tuesday and the highly anticipated Fed decision on Wednesday.

This coupled with any fresh trade-related updates, which has been a key factor influencing the broader market risk-sentiment, will help investors to determine the pair's next leg of a directional move. 

Technical levels to watch