EUR/USD gasps for breath at 1.17 as the decline continues ahead of German GDP

The Euro looks set to extend declines as the Greenback rebounds on an inflation-happy FOMC.
Europe's economic slump from the first quarter is leaking suspiciously into the second quarter, and German GDP figures are expected to be subdued.

Joshua Gibson FXStreet

The EUR/USD is trading around the 1.1700 level ahead of Thursday's European market session, and the pair is struggling to develop a bounce from Wednesday drop.

The FOMC was pleasingly optimistic for Dollar bulls, and the USD gained ground against its major counterparts including the Euro as the FOMC signaled it is comfortable with allowing inflation to run higher within the US economy, bedding down market concerns of excessive rate hikes throughout 2018, at least temporarily.

Thursday brings a new challenge for the US Dollar, as the Trump administration gears up to deploy hefty tariffs on foreign vehicle imports, delivering a blow to NAFTA renegotiations as the US government employs the already-familiar Section 232 of citing national security concerns as an impetus for trade tariffs.

German GDP figures will also be hitting today at 06:00 GMT, with headline quarter-on-quarter GDP for 2018's Q1 expected at 0.3%, in-line with the previous figure. After that will be Monetary Policy Meeting Accounts from the European Central Bank (ECB) at 11:30 GMT, followed by Continuing Jobless Claims from the US at 12:30, expected to print at 1.754 million, a slight uptick from the previous reading of 1.707 million.

EUR/USD levels to watch

FXStreet's Chief Analyst, Valeria Bednarik, noted that the EUR/USD waffled post-FOMC, and the technical positioning for the Euro for Thursday is leaning to the bearish side: "the EUR/USD pair extended its decline post-FOMC's Minutes, heading into the Asian opening below the 1.1700 figure, and poised to extend its decline according to intraday technical readings, as in the 4 hours chart, the pair is back below its 20 SMA after a false bullish breakout earlier this week. Technical indicators in the mentioned chart have accelerated south below their midlines, with the RSI currently nearing oversold readings. The pair has a strong static mid-term support at 1.1660, and a break below it should lead to a steeper slide regardless oversold conditions."

Support levels: 1.1660 1.1620 1.1590

Resistance levels: 1.1720 1.1750 1.1785

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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