EUR/USD: Trading the German Preliminary GDP February 2017


German Preliminary GDP, which is released every quarter, is a measurement of the production and growth of the economy. Analysts consider GDP one the most important indicators of economic activity. A reading which is better than the market forecast is bullish for the euro.

Here are all the details, and 5 possible outcomes for EUR/USD.

Published on Tuesday at 7:00 GMT.

Indicator Background

As the largest economy in the Eurozone, Germany’s GDP is highly anticipated by the market and can have a significant effect on the movement of EUR/USD.

German GDP dropped to 0.2% in Q4 of 2016, shy of the estimate of 0.3%. The estimate for Q1 stands at 0.5%.

Sentiments and levels

Eurozone data has been improving, as growth and inflation data continue to head upwards. The US economy remains strong, and Janet Yellen is expected to testify that the Fed plans to raise rates several times in 2017. So, the overall sentiment is neutral on EUR/USD towards this release.

Technical levels, from top to bottom: 1.0950, 1.0870, 1.0775, 1.0650, 1.0615 and 1.0570.

5 Scenarios

  1. Within expectations: 0.2% to 0.8%. In such a scenario, EUR/USD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 0.9% to 1.3%: A strong reading could send the pair above one resistance line.
  3. Well above expectations: Above 1.3%: The chances of such a scenario are low. Such an outcome would likely push EUR/USD upwards, and a second resistance level might be broken as a result.
  4. Below expectations: -0.3% to 0.1%:  In this scenario, the pair to drop and break one support level.
  5. Well below expectations: Below -0.3%. A considerable contraction in growth could push EUR/USD below a second support level.

For more on the euro, see the EUR/USD forecast.

Get the 5 most predictable currency pairs

About Author

Kenny Fisher - Senior Writer A native of Toronto, Canada, Kenneth worked for seven years in the marketing and trading departments at Bendix, a foreign exchange company in Toronto. Kenneth is also a lawyer, and has extensive experience as an editor and writer.

Comments are closed.