Search ForexCrunch

Gross Domestic Product (GDP) indicator  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 Friday at 6:00 GMT.

Indicator Background

German GDP is released quarterly, and as the largest economy in the Eurozone, German numbers  are highly anticipated by the market.  An unexpected German GDP  reading can have an immediate  effect on the movement of EUR/USD.

The Q1 reading slipped to 0.3%, within expectations. The markets are expecting  a  rise in the Q2 report, with a forecast of 0.5%.

Sentiments and levels

Although we are seeing some improvements in the euro-zone economies, in the bigger picture, the trend remains to the downside and it could resume when Greek talks approach the deadline in the following week. As well, continuing speculation about a Fed rate is good news for the greenback. So, the overall sentiment is  neutral on EUR/USD towards this release.

Technical levels, from top to bottom: 1.1373, 1.1290, 1.1190, 1.1050, 1.0863 and  1.0815.

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 1.2%: An unexpectedly strong  reading  could send  the pair above  one  resistance line.
  3. Well above expectations: Above 1.2%: 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: 1.3% to 1.6%:   A lower GDP figure than  forecast could cause the  pair to  drop and break one support level.
  5. Well below expectations:  Below 1.3%.  In this scenario,  EUR/USD could break below a second support level.

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

To follow this event live:     [do action=”calendar-event” eventid=”64191794-d123-4355-b424-62a53a5383e1″/]