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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, so  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 Thursday at 12:30 GMT.

Indicator Background

US GDP reports  are released quarterly, and provide an excellent indication of the health of the US economy. Traders should pay particular attention to this economic indicator and treat it as a market-mover.

Preliminary GDP is the second  GDP release for Q2, following Advance GDP, which was released in July.  The Advance  GDP report posted a strong gain of 2.3%,  slightly short of  the forecast of 2.6%.  The markets are  expecting a strong Q2 from Preliminary GDP, with an estimate of 3.2%.

Sentiments and levels

The euro has benefitted nicely from the outcome of the worries about China and the  crisis in Greece. These factors could continue boosting the  euro, which is behaving as a safe haven currency. On the other hand, after the current rally,  we could see some profit taking as well as worries from the ECB. The US economy is steady, as the guessing game about a rate hike by the Fed  continues.  So, the overall sentiment is  neutral on EUR/USD towards this release.

Technical levels, from top to bottom: 1.1535, 1.15, 1.1460, 1.1373, 1.1290, and 1.1215.

5 Scenarios

  1. Within expectations: 2.8% to 3.6%. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 3.7% to 4.1%: An unexpected higher reading can send the pair  below one support  line.
  3. Well above expectations: Above 4.1%:  An outstanding reading would,  likely boost the dollar and  two or more  support lines might break as a result.
  4. Below expectations: 2.3% to 2.7%: A  weak reading  could  push the pair higher  and break one level of resistance.
  5. Well below expectations: Below 2.3%.  In this scenario, the EUR/USD would  likely move  higher  and could break two or more lines of resistance.

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

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