When is German GDP data and how could it affect EUR/USD?

Omkar Godbole FXStreet Contributor

German GDP overview

German gross domestic product (GDP) due at 06:00 GMT is forecasted to show the economy expanded 0.4% quarter-on-quarter in the first three months of 2019. The growth rate had stalled in the final quarter of 2018. The annualized GDP is forecasted to rise 0.7% in the first quarter, having risen by 0.9% in the final three months of the previous year.

Weak German growth rate priced in

That German economy has slowed down considerably over the last few quarters is generally accepted by now and seems to have been priced in by markets. This is evident from the fact that EUR/USD has dropped from 1.1570 to 1.11 in the first five months of this year despite the rising odds of Fed rate cut.

German growth picked up pace in the first quarter

Having narrowly escaped recession in the second half of 2018, German economy is widely forecasted to have picked up pace in the first quarter of 2019. This is because China’s economy stabilized in the first three months and German consumer spending, as represented by retail sales, ticked higher.

Impact on EUR/USD

EUR/USD is on the defensive, having validated Monday’s bearish inverted hammer with a close below 1.1222 on Tuesday. Essentially, the upside break of the trendline connecting March 20 and April 17 highs confirmed on Friday failed to entice buyers and the pair ended up carving another bearish lower high at 1.1263.

The pair, therefore, looks set to test 1.1176 (March 7 low) and could slide further if Germany reports a weaker-than-expected rebound in growth rate. The losses could be limited around 1.1176 if German GDP matches estimates, while a move above 1.1263 could be seen if the growth rate beats expectations by a big margin.

A daily close above 1.1263 would invalidate the bearish lower highs pattern and allow a stronger rally toward the 200-day moving average, currently lined up at 1.1397. The bulls, however, may struggle to force a daily close above 1.1263, courtest of heightened US-China trade tensions.

About German GDP

The Gross Domestic Product released by the Statistisches Bundesamt Deutschland is a measure of the total value of all goods and services produced by Germany. The GDP is considered as a broad measure of the German economic activity and health. A high reading or a better than expected number has a positive effect on the EUR, while a falling trend is seen as negative (or bearish).

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

EUR/USD trims gains, hovers around 1.1900 post-US data

EUR/USD trades slightly on the back foot around the 1.1900 region in a context dominated by the resurgence of some buying interest around the US Dollar on turnaround Tuesday. Looking at the US docket, Retail Sales disappointed expectations in December, while the ADP 4-Week Average came in at 6.5K.

GBP/USD comes under pressure near 1.3680

The better tone in the Greenback hurts the risk-linked complex on Tuesday, prompting GBP/USD to set aside two consecutive days of gains and trade slightly on the defensive below the 1.3700 mark. Investors, in the meantime, keep their attention on key UK data due later in the week.

Gold loses some traction, still above $5,000

Gold faces some selling pressure on Tuesday, surrendering part of its recent two-day advance although managing to keep the trade above the $5,000 mark per troy ounce. The daily pullback in the precious metal comes in response to the modest rebound in the US Dollar, while declining US Treasury yields across the curve seem to limit the downside.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.

Dollar drops and stocks rally: The week of reckoning for US economic data

Following a sizeable move lower in US technology Stocks last week, we have witnessed a meaningful recovery unfold. The USD Index is in a concerning position; the monthly price continues to hold the south channel support.

Bitcoin Cash trades lower, risks dead-cat bounce amid bearish signals

Bitcoin Cash (BCH) trades in the red below $522 at the time of writing on Tuesday, after multiple rejections at key resistance. BCH’s derivatives and on-chain indicators point to growing bearish sentiment and raise the risk of a dead-cat bounce toward lower support levels.