US Q2 GDP Overview
Thursday's US economic docket highlights the releases of the final Q1 GDP print, scheduled at 12:30 GMT. The final estimate is expected to match the preliminary release and confirm that the world's largest economy expanded by 6.6% during the April-June period. Although backwards-looking, the report will provide an insight into how much momentum the US economy had then or whether the momentum is already starting to slow. This, in turn, will set the tone going into the final quarter of the year.
How Could it Affect EUR/USD?
The data is unlikely to derail expectations about an early policy tightening by the Fed or affect the US dollar bulls. A stronger than expected reading will reinforce speculations and continue acting as a tailwind for the buck. Conversely, a downward revision – though unlikely – might prompt some profit-taking around the greenback and provide a modest lift to the EUR/USD pair. That said, any immediate market reaction is more likely to be short-lived, suggesting that the path of least resistance for the pair remains to the downside.
Meanwhile, Yohay Elam, Analyst at FXStreet offered a brief technical outlook for the major: “Euro/dollar is oversold according to the Relative Strength Index (RSI) on the four-hour chart, which is significantly below 30. That indicates a bounce. Other indicators such as Simple Moving Averages (SMAs) are bearish.”
Yohay further provided important technical levels to trade the pair: “Immediate support awaits at 1.1590, which was Wednesday's trough, and the lowest since November 2020. It is followed by 1.1550 and 1.15, levels recorded a year ago. Some resistance is at the daily high of 1.1610, followed by 1.11660, which cushioned EUR/USD before the collapse. The next lines to watch are 1.1680 and 1.17.”
Key Notes
• EUR/USD Forecast: Bounce, then fresh fall? How the last day of Q3 could unfold
• EUR/USD regains some composure around 1.1600, looks to data
• EUR/USD Price Analysis: Charting a bear flag but oversold conditions warrant caution
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 the USD, while a low reading is negative.
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