Search ForexCrunch

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, and publication of  Preliminary GDP could have a significant impact on the movement of EUR/USD. A reading which is higher than the market forecast is bullish for the dollar.

Update:  US GDP disappoints, unchanged at 1.9% – USD down

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

Published on Tuesday at 13:30 GMT.

Indicator Background

GDP reports are released quarterly, with Preliminary GDP following the Advance GDP report. Traders should pay particular attention to this economic indicator and treat it as a market-mover.

Advance GDP for Q4 posted a gain of 1.9%, shy of the forecast of 2.1%. The estimate for Preliminary GDP remains at 1.9%.

Sentiments and levels

Eurozone growth and inflation indicators continue to point upwards, which is bullish for the euro. The French elections could inject some volatility in the markets. In the US, there is increasing uneasiness over Trump.  So, the overall sentiment is bullish on EUR/USD towards this release.

Technical levels, from top to bottom: 1.0870, 1.0775, 1.0720, 1.0660, 1.06 and  1.0520

5 Scenarios

  1. Within expectations: 1.4% to 2.3%. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 2.4% to 2.8%: An unexpected higher reading can send the pair  below one support  line.
  3. Well above expectations: Above 2.8%: Such an outcome could push EUR/USD downwards, and a second  support line might break as a result.
  4. Below expectations: 2.3% to 2.7%: A weak figure could  push the pair higher  and break one level of resistance.
  5. Well below expectations: Below 2.3%.  In this scenario, the EUR/USD could  move higher  and break above a second resistance line.

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