EUR/USD: On the back foot with three-day losing streak ahead of US GDP

EUR/USD appears on track to test the recent low of 1.1107, having dropped for a third straight day on Wednesday and may print fresh 2019 lows in the North American session if the US reports a better-than-expected first quarter GDP. 

The currency pair is currently trading at 1.1138, representing marginal gains on the day. 

The shared currency fell 0.26% on Wednesday with German jobs data confirming the Eurozone’s strongest economy is going through a rough patch. Germany’s unemployment rate rose from 4.9% to 5.%, marking the first increase in two years. Also, Germany reported the largest one month increase in unemployment in 10 years.

The pair had dropped 0.11% and 0.28% on Monday and Tuesday, respectively, With the three-day losing streak, the EUR has established a bearish lower high at 1.1215. As a result, the low of 1.1107 hit on May 23 could come into play in the European session – more so, as the US-China trade tensions are showing no signs of abating. 

Also, a drop to fresh 2019 lows below 1.11 could be seen if the US macro data betters market expectations, leading to a drop in the Fed rate cut probability. 

The Gross Domestic Product Annualized (Q1), due at 12:30 GMT, is expected to show the US economy expanded 3.1% as opposed to the initial estimate of 3.2% growth. The economy registered a growth rate of 2.2% in the fourth quarter. 

The EUR/USD pair, however, may reverse course for a retest of 1.1215 (May 27 high) if the US GDP is revised significantly lower, validating recession fears and strengthening the case for an early Fed rate cut. 

Pivot levels