EUR/USD: Trading the US Final GDP

EUR/USD: Trading the US Final GDP

US  Final GDP is a key release and is published each quarter.  GDP reports measure production and growth of the economy, and  are considered by analysts as one the most important indicators of economic activity. A reading which is  higher than the market forecast is bullish for the dollar.

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

Published on Tuesday at 12:30 GMT.

Indicator Background

US Final  GDP is the final of three GDP reports. Traders should pay close attention to this GDP release, as an unexpected reading could quickly affect the direction of EUR/USD.

US  Preliminary GDP  posted a  gain of 0.8% in Q1, matching the estimate. The estimate for Final GDP for Q1 stands at 1.0%.

Sentiments and levels

The stunning Brexit is now reality and it is not good news for Europe. Even if there is no new stimulus from the ECB, the economic situation is likely to deteriorate. Over in the US,  the Fed is not likely to raise rates anytime soon.  However, monetary policy divergence will continue with the ECB  continuing its QE program at full speed. So, the overall sentiment is  bearish on EUR/USD towards this release.

Technical levels, from top to bottom: 1.1230, 1.1175, 1.1070, 1.10, 1.0905 and 1.0825

5 Scenarios

  1. Within expectations: 0.7% to 1.3%: In such a scenario, EUR/USD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 1.4% to 1.8%: An unexpected higher reading can push the pair  below one  support line.
  3. Well above  expectations: Above 1.8%: A strong reading  would likely boost the dollar, and the pair could break  below a second support line  as a result.
  4. Below expectations: 0.2% to 0.6%: In this scenario, EUR/USD could  push above one  resistance level.
  5. Well below  expectations: Below 0.2%. A  poor reading  could  result in  the pair breaking above a second resistance line.

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

Kenny Fisher

Kenny Fisher

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.