EUR/USD analysis: US economy grows alongside with the trade deficit
|EUR/USD Current price: 1.2387
- US Q4 GDP revised higher, trade deficit keeps widening.
- EUR/USD gaining bearish traction in the short term.
The EUR/USD pair trades little changed right below the 1.2400 mark after the release of US data, as despite Q4 growth was revised higher, the country's goods trade balance printed a larger-than-expected deficit. The final reading of US GDP came in at 2.9%, better than the 2.7% expected and the previous estimate of 2.5%, although the Persona Consumption Expenditures Price for the three months to December ended at 2.7% as expected. The trade deficit for February, however, widened to $75.35B.
In the meantime, European equities keep recovering from their early lows, and US indexes are poised to open little changed from Tuesday's close, while yields are bouncing modestly from their lows, which results in risk aversion easing, at least temporarily.
The 4 hours chart for the pair shows that it can't recover above a bullish 20 SMA, but also that the downward potential is limited, as technical indicators hold right above their mid-lines. Upcoming moves will be more related to stocks behavior rather than the recent releases, with a break below 1.2370 leaning the scale toward the downside for the rest of the day.
Support levels: 1.2370 1.2335 1.2300
Resistance levels: 1.2415 1.2445 1.2480
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