The economies of the Euro-zone grew by 0.8% according to the initial release. This is significantly better than 0.6% that was predicted, but not so good after we’ve received excellent results by individual countries published earlier today. EUR/USD loses momentum within range.
The overall release shows the gap between Germany, which grew by 1.5% in Q1, and the whole Euro-zone, that grew by only 0.8%. EUR/USD is ticking lower from the peak over 1.4340 and is now at 1.4315. It’s well within the 1.4282 – 1.4375 range.
Earlier today, GDP reports from Europe’s biggest countries were surprisingly good: France grew by 1%, significantly better than 0.6%. There were some optimistic hints regarding the Euro-zone’s second largest country.
Regarding Europe’s largest country, the outcome was even better – Germany grew by 1.5%, much higher than 0.9%, and very impressive. Germany continues to be Europe’s powerhouse.
The third largest economy, Italy, posted a slight disappointment with a growth rate of 0.3%( exp. +0.4%). The fourth largest country in the 17 nation Euro-zone, Spain, grew by 0.3%, when only 0.2% was predicted. This provides optimism that Spain is indeed different from the other indebted countries, despite worrying signs that Spain is similar to Ireland.
These early reports sent EUR/USD significantly higher. The pair made a strong upwards move of over 100 pips, crossing the 1.4282 line on the way. The move stopped at around 1.4340, short of the 1.4375 line.
Further resistance is at 1.4450, and lower support is at 1.4160. For more lines and analysis, see the EUR/USD forecast.
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