EUR/USD: Focus on US GDP, US dollar vulnerable to sell the fact trade

EUR/USD remains on the defensive, having found acceptance below 1.176.
The recent surge in dollar index suggests markets may have priced-in a better-than-expected Q1 US GDP.
EUR/USD may see a corrective bounce post-GDP.

Omkar Godbole FXStreet Contributor

EUR/USD may see a corrective bounce if the preliminary first-quarter US GDP reading matches or fails to beat expectations by a big margin.

The upbeat US retail sales data released a week ago pointed to a stronger economy in the first three months than previously expected. Notably, the widely-tracked Atlanta Fed's GDPNow tracker rose to 2.8 percent following the release of the retail sales data, having begun the year with a 0.3 percent projection for the first quarter.

As a result, the American dollar has been better bid right from the start of the current week. This is evident from EUR/USD’s drop from the high of 1.1324 seen on April 17 to a 22-month low of 1.1118 yesterday. Further, the dollar index, which tracks the value of the greenback against majors, has risen from 97.18 to an 11-month high of 98.32 over the last few days.

Put simply, investors seem to have priced-in an above-forecast GDP reading. The data due at 12:30 GMT is expected to show the economy expanded at an annualized rate of 2.1 percent in the first quarter, having registered a growth rate of 2.2 percent in the preceding quarter.

The EUR/USD pair could see a corrective bounce if the GDP fails to beat expectations by a big margin (Atlanta Fed’s GDPNow tracker sees growth rate at 2.7 percent).

The common currency, however, may slide below 1.11 if the GDP prints above 3 percent.

Technical Levels

1. R3 1.1204
2. R2 1.1184
3. R1 1.1159
PP 1.1138
1. S1 1.1113
2. S2 1.1093
3. S3 1.1067

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD climbs to daily highs near 1.1820

EUR/USD now picks up pace and advances to the area of daily peaks north of the 1.1800 barrier at the end of the week. The pair’s decent move higher comes against the backdrop of a generalised lack of direction in the FX galaxy and the mild offered stance in the US Dollar.

GBP/USD trims losses, retests 1.3460

After briefly challenging its key 200-day SMA near 1.3440, GBP/USD now manages to regain some balance and revisit the 1.3460 zone on Friday. Cable’s pullback comes as the selling pressure on the Greenback gathers traction, reigniting some recovery in the risk-linked space.

Gold flirts with four-week highs past $5,200

Gold extends its rebound, climbing for a third consecutive session and pushing back above the $5,200 mark per troy ounce on Friday. The move higher continues to draw support from lingering geopolitical tensions and the ongoing uncertainty surrounding US trade policy, both of which are keeping safe-haven demand firmly in play.

Bitcoin, Ethereum and Ripple consolidate with short-term cautious bullish bias

Bitcoin, Ethereum and Ripple are consolidating near key technical areas on Friday, showing mild signs of stabilization after recent volatility. BTC holds above $67,000 despite mild losses so far this week, while ETH hovers around $2,000 after a rejection near its upper consolidation boundary.

Changing the game: International implications of recent tariff developments

The Supreme Court ruling on International Emergency Economic Powers Act (IEEPA) tariffs provides limited relief for the rest of the world, with weighted average tariff rates modestly lower.

Starknet unveils strkBTC, shielded Bitcoin transactions on Ethereum Layer 2

Starknet, the Ethereum Layer 2 network developed by StarkWare, today announced strkBTC, a wrapped Bitcoin asset that introduces optional shielding while preserving full DeFi composability.