EUR/USD in a phase of bearish consolidation near 1.1140, US GDP eyed

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  • Extends range trade below mid-1.11s amid cautious markets.
  • Awaits fresh direction from US Q1 advance GDP report.
  • Strong US durable goods data suggest a positive surprise in the US GDP.

The tepid recovery attempts in the EUR/USD pair continue to get sold-off into the 1.1250 upside barrier, as sellers lurk amid expectations of upbeat US Q1 growth numbers.

However, the spot could see a corrective bounce towards the key support-turned-resistance of 1.1176 should the preliminary GDP numbers disappoint. Markets are expecting the US Q1 advance GDP reading to arrive at 2.1% y/y vs. 2.2% expected but the report could surprise to the upside, given the recent strong US retail sales and durable goods data.

“Notably, the widely-tracked Atlanta Fed’s GDP Now tracker rose to 2.8 percent following the release of the retail sales data, having begun the year with a 0.3 percent projection for the first quarter,” FXStreet’s Analyst, Omkar Godbole notes.

Meanwhile, on the EUR-side of the story, the recent slew of downbeat Euro area fundamentals continue to underscore the bloc’s dwindling economic growth prospects while highlighting the relative strength of the US economy, which remains EUR-negative. More so, the latest downbeat remarks by the ECB Governing Council member on the interest rates and inflation outlook also keep the recovery in check.

Looking ahead, the fate of the EUR/USD pair remains at the mercy of the US GDP figures, with a positive surprise likely to trigger an extensive USD rally, drowning the EUR/USD pair to the next downside target of 1.1100.

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