US Q2 GDP Overview
Thursday's US economic docket highlights the release of the Final GDP print for the second quarter, scheduled at 12:30 GMT. The second revision is expected to show that the world's largest economy contracted by a 0.6% annualized pace during the April-June period, matching the previous estimates.
How Could it Affect EUR/USD?
The backwards-looking data might do little to push back against expectations that the Fed will continue to hike interest rates at a faster pace to curb inflation. Hence, the focus will remain glued to the US Core PCE Price Index - the Fed's preferred inflation gauge, suggesting that the final US GDP might do little to provide any meaningful impetus. That said, an upward revision will be seen as a positive trigger for the US dollar bulls and prompt fresh selling around the EUR/USD pair.
Meanwhile, Eren Sengezer, Editor at FXStreet, offered a brief technical outlook for the EUR/USD pair: “The Relative Strength Index (RSI) indicator on the four-hour chart stays near 50 and EUR/USD trades slightly above the 20-period SMA, which is currently located at 0.9635. As long as this level stays intact, the pair could try to stage another rebound.”
Eren also outlines important levels to trade the EUR/USD pair: “On the upside, 0.9670 (Fibonacci 23.6% retracement of the latest downtrend) aligns as immediate resistance before 0.9700 (psychological level) and 0.9740 (Fibonacci 38.2% retracement). If the pair manages to stabilize above that last hurdle, sellers could move to the sidelines and open the door for additional gains.”
“0.9635 (20-period SMA) forms first support before 0.9600 (psychological level) and 0.9550 (static level, the end-point of the downtrend),” Eren adds further.
Key Notes
• EUR/USD Forecast: Euro needs to capture 0.9740 to extend rebound
• EUR/USD: Bears regain control below the 0.9700 mark
• EUR/USD: Unlikely to hold above 0.95 – SocGen
About US GDP
The Gross Domestic Product Annualized released by the US Bureau of Economic Analysis shows the monetary value of all the goods, services and structures produced within a country in a given period of time. GDP Annualized is a gross measure of market activity because it indicates the pace at which a country's economy is growing or decreasing. Generally speaking, a high reading or a better than expected number is seen as positive for equities, while a low reading is negative.
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