When is the German Preliminary Q3 GDP and how could it affect EUR/USD?
|German GDP overview
German gross domestic product (GDP) due at 07:00 GMT is expected to show the economy contracted 0.1% quarter-on-quarter in June to September (Q3) period, having decreased by 0.1% in the first quarter.
The annualized GDP is forecasted to print at +0.5% in Q3 vs. the previous quarter's reading of +0.4%.
How could it affect the EUR/USD?
A negative GDP print won't be a surprise and could strengthen the bearish pressures around the EUR, undermined by the German manufacturing recession, even though the forward-looking German ZEW survey pointed to some improvement in the outlook for the German economy. Notably, at -2.1, the ZEW Economic Sentiment Index for November surpassed expectations of -13 by a big margin.
Meanwhile, the technical set up continues to favor the bears, as the pair remains on the track to test the immediate support of mid-October lows at 1.0991. A break below which could intensify selling pressure, as the bears eye 1.0950 (psychological level) as the next support. The further downside in spot could expose the multi-year lows of 1.0879 once again.
However, if the data surprises on the upside, the pair could attempt a pullback towards 1.1040/56, the confluence zone of the 50 and 10-DMA. Buyers could yearn for a test of the 100-DMA at 1.1100 on a sustained break above the last. The 12-bar Moving Average Convergence and Divergence (MACD) on the 4-hour chart has turned bullish, also favoring a case for a brief correction.
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About German GDP
The Gross Domestic Product released by the Statistisches Bundesamt Deutschland is a measure of the total value of all goods and services produced by Germany. The GDP is considered as a broad measure of the German economic activity and health. A high reading or a better than expected number has a positive effect on the EUR, while a falling trend is seen as negative (or bearish).
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