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


  • EUR/USD has charted a bearish lower high at 1.1215. 
  • The pair appears on track to set new 2019 low below 1.11. 
  • A deeper drop could be seen if the US Q1 GDP is kept unchanged or revised higher. 

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

    1. R3 1.1213
    2. R2 1.1194
    3. R1 1.1163
  1. PP 1.1143
    1. S1 1.1112
    2. S2 1.1093
    3. S3 1.1062

 

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