How to trade the Final US GDP with EUR/USD

The Final US GDP report for Q4 2017 is a significant market mover ahead as the quarter draws to a close.
The Market Impact Tool shows trading opportunities in both upside and downside surprises on this event.

Yohay Elam FXStreet

Selling EUR/USD Scenario

Tradable Positive Trigger: +0,37deviation [SELL Pair]
Key Support Level: 1.2360

If it comes out at higher than expected with a deviation of +0,37 or higher, the pair may go down reaching a range of 41 pips in the first 15 minutes and 83 pips in the following 4 hours

Support levels are to be found approximately at 1.2330 and 1.2260 accordingly to the Confluence Indicator.

Vestiges of demand can be seen around 1.2320 and below at 1.2280, based on aggregated trading positions from FXStreet's dedicated contributors

Buying EUR/USD Scenario

Tradable Negative Trigger: -0,51 deviation [BUY Pair]
Key Resistance Level: 1.2420

If it comes out lower than expected at a deviation of -0,51 or less, the EUR/USD may up reaching a range of 36 pips in the first 15 minutes and 74 pips in the following 4 hours

On the upside, there are clusters of resistance at 1.2420 and 1.2445.

From a positioning perspective, supply is noted at 1.2450 and above.1.2555.

Only 20% of EUR-based pairs are in bullish mode against a basket of 20 world currencies accordingly to the EUR-Bullish Percentage Index. As such, a release which surprises the market with a negative trigger (USD negative) may lead to a stronger up move in the EUR/USD.

EUR/USD Levels on the Chart

More data

In the last five releases, the EUR/USD moved, on average, 19 pips in the 15 minutes after the release and 51 pips in the 4 hours after the announcement. The previous release had no surprise in terms of deviation.

The US releases its Gross Domestic Product estimates three times, and revisions are quite frequent. Higher growth levels imply a faster pace of tightening by the Federal Reserve, while slower growth may slow Fed Chair Powell and his team with the speed of rate hikes.

In the second release for the last quarter of 2017, the annualized growth rate stood at 2.5%. An upgrade to 2.7% is on the cards. These levels are slower than Q2 and Q3 2017 when the US economy grew at a clip of over 3%. However, it is faster than the pace projected for the first quarter of 2018.

More: US Final GDP and PCE, and the EUR/USD Follow the publication of the figure on the economic calendar. Watch out for the data from the Market Impact tool, projecting the potential price changes according to the deviation. Here is the Market Impact Studies Users Guide.

Author

Yohay Elam

FXStreet

Yohay is in Forex since 2008 when he founded Forex Crunch, a blog crafted in his free time that turned into a fully-fledged currency website later sold to Finixio.

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