- The pair loses some upside momentum on German GDP figures.
- German flash Q1 GDP came in at 0.4%, in line with consensus.
- EMU advanced Q1 GDP figures coming up next.
The single currency is fading part of the initial optimism and is now prompting EUR/USD to return to the boundaries of 1.1200 the figure in the wake of German data releases.
EUR/USD looks to data, trade
Spot eased some ground after preliminary readings for GDP figures in Germany showed the economy is expected to expand at a quarterly 0.4% during the January-March period and 0.6% on an annualized basis, somewhat disappointing market expectations.
The riskier assets, and EUR, have regained some poise following renewed hopes of a US-China trade deal on Wednesday and have practically ignored below-consensus figures from the Chinese calendar published earlier in the Asian session.
Moving forward, flash prints from EMU Q1 GDP will keep the attention on the shared currency later in the session, while Retail Sales and the NY Empire State index will be salient releases across the pond along with speeches by FOMC’s R.Quarles and T.Barkin.
What to look for around EUR
Recent data releases in Euroland and Germany have poured cold water over the idea that some healing process could be under way in the region, re-shifting the focus to the ongoing slowdown and its likely duration and extension. In the meantime, the current ‘neutral/dovish’ stance from the ECB is expected to persist for the reminder of the year and probable H1 2020. The broad-based risk-appetite trends and USD-dynamics are posed to rule the sentiment surrounding the European currency for the time being, all in combination with the onoging US-China trade dispute and potential US tariffs on EU products. On the political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections in late May, as the populist option in the form of the far-right and the far-left movements appears to keep swelling among voting countries.
EUR/USD levels to watch
At the moment, the pair is gaining 0.03% at 1.1206 and a break above 1.1264 (high May 1) would target 1.1313 (100-day SMA) en route to 1.1323 (high Apr.17). On the downside, immediate support aligns at 1.1176 (monthly low Mar.7) seconded by 1.1135 (low May 3) and finally 1.1109 (2019 low Apr.26).
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