US Preliminary GDP is a measurement of the production and growth of the economy. Analysts consider GDP one the most important indicators of economic activity, and publication of Preliminary GDP could have a significant impact on the movement of EUR/USD. A reading which is better than the market forecast is bullish for the dollar.
Here are all the details, and 5 possible outcomes for EUR/USD.
Published on Friday at 12:30 GMT.
Indicator Background
GDP reports are released quarterly, with Preliminary GDP following the Advance GDP report. Traders should pay particular attention to this economic indicator and treat it as a market-mover.
Advance GDP for Q1, which was released in April, posted a gain of 0.5%, shy of the forecast of 0.7%. The markets are bracing for a stronger Preliminary GDP, with an estimate of 0.8%.
Sentiments and levels
The Fed minutes gave another boost to the dollar and this overshadows the weakness in the euro. The odds of a US rate hike have dramatically increased, and this sentiment is bullish for the US dollar. So, the overall sentiment is bearish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.1220, 1.1140, 1.1050, 1.10, 1.0850 and 1.0780
5 Scenarios
- Within expectations: 0.5% to 1.1%. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 1.2% to 1.6%: An unexpected higher reading can send the pair below one support line.
- Well above expectations: Above 1.6%: Such an outcome could push EUR/USD downwards, and a second support line might break as a result.
- Below expectations: 0.0% to 0.4%: A weak figure could push the pair higher and break one level of resistance.
- Well below expectations: Below 0.0%. If GDP contracts, the EUR/USD could move higher and break above a second resistance line.
For more on the euro, see the EUR/USD forecast
Share
