EUR/USD spikes back closer to multi-month tops post US GDP

The EUR/USD pair built on to its momentum back above the 1.1700 handle and jumped to fresh session tops following the release of US growth numbers.

Currently trading around mid-1.1700s, the pair caught some fresh bids after the advance US GDP showed economic growth accelerated to an annualized pace of 2.6% during the second quarter of 2017. 

The reading was bang in-line with 2.6% consensus estimates and was well above 1.4% growth recorded in the previous quarter but the disappointment came from a larger-than-expected drop in employment cost index. 

The finer details revealed that employment cost index rose by 0.5% q-o-q, less than 0.6% expected and worse than previous quarter's 0.8% rise, which now seems to have fueled concerns of slowing inflationary pressure. 

The same is evident from a sharp reversal in the US Treasury bond yields, which eventually was seen weighing heavily on the already weaker US Dollar and continued driving the pair higher through early NA session.

Meanwhile, today's slightly better-than-expected German flash CPI print also underpinned the shared currency and remained supportive of the strong bid tone surrounding the major.

Technical outlook

Valeria Bednarik, Chief Analyst at FXStreet writes, "the  technical picture is bullish short-term, as in the 4 hours chart, the price remains above a bullish 20 SMA, whilst technical indicators regained the upside after bouncing from their mid-lines. The current 1.1710 region has prove strong in the past, which means that an upward acceleration from current levels should lead to a retest of the yearly high of 1.1776, en route to 1.1800. A weekly close beyond this last, will lift next week's bullish target to 1.2000. Supports today come at 1.1650, and 1.1620 with breaks below this last being quite unlikely."