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 expected to show the economy contracted 0.1% quarter-on-quarter in April to June period, having expanded by 0.4% in the first quarter.

The annualized GDP is forecasted to print at -0.3%, down from the previous quarter's reading of 0.6%.

German bond market is pointing to a recession

The entire German yield curve has entered the negative territory for the first time on record. Put simply, German government bonds are offering negative returns at both short and end long end of the curve.

Further, the yield curve has inverted with the 10-year yield trading below the 3-month yield. Curve inversion is widely considered a sign of recession.

So, a negative GDP print won't be a surprise but may end up strengthening the bearish pressures around the EUR as the key figure is scheduled for release a day after the forward-looking ZEW surveys pointed to a significant deterioration in the outlook for the German economy.

Notably, at -44.1, the ZEW Economic Sentiment Index for August was the worst figure since May 2010.

With the forward-looking indicators painting a gloomy picture due to the recent escalation of trade tension, the path of least resistance for the EUR appears to be on the downside.

On technical charts, the pair is looking heavy, having faced rejection above 1.1220 in the previous six trading days and could drop to 1.11 on weak German GDP

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 recedes to daily lows near 1.1850

EUR/USD keeps its bearish momentum well in place, slipping back to the area of 1.1850 to hit daily lows on Monday. The pair’s continuation of the leg lower comes amid decent gains in the US Dollar in a context of scarce volatility and thin trade conditions due to the inactivity in the US markets.

GBP/USD resumes the downtrend, back to the low-1.3600s

GBP/USD rapidly leaves behind Friday’s decent advance, refocusing on the downside and retreating to the 1.3630 region at the beginning of the week. In the meantime, the British Pound is expected to remain under the microscope ahead of the release of the key UK labour market report on Tuesday.

Gold looks inconclusive around $5,000

Gold partially fades Friday’s strong recovery, orbiting around the key $5,000 region per troy ounce in a context of humble gains in the Greenback on Monday. Additing to the vacillating mood, trade conditions remain thin amid the observance of the Presidents Day holiday in the US.

Bitcoin consolidates as on-chain data show mixed signals

Bitcoin price has consolidated between $65,700 and $72,000 over the past nine days, with no clear directional bias. US-listed spot ETFs recorded a $359.91 million weekly outflow, marking the fourth consecutive week of withdrawals.

The week ahead: Key inflation readings and why the AI trade could be overdone

It is likely to be a quiet start to the week, with US markets closed on Monday for Presidents Day. European markets are higher across the board and gold is clinging to the $5,000 level after the tamer than expected CPI report in the US reduced haven flows to precious metals.

Monero Price Forecast: XMR risks a drop below $300 under mounting bearish pressure

Monero (XMR) starts the week under pressure, recording a 4% decline at press time on Monday after a 7% drop the previous day, putting the $300 support zone in focus.