EUR/USD: Trading the US Final GDP

EUR/USD: Trading the US Final GDP

 

US Final GDP is a key release and is published each quarter. GDP reports measure production and growth of the economy, and are considered by analysts as one the most important indicators of economic activity. A reading which is higher than the market forecast is bullish for the dollar.
Here are all the details, and 5 possible outcomes for EUR/USD.
Published on Friday at 12:30 GMT.
Indicator Background
Final GDP is the final of three GDP versions. Traders should pay close attention to the GDP release, as an unexpected reading could quickly affect the direction of EUR/USD.
US Preliminary GDP posted a gain of 1.0% in Q4, well above the estimate of 0.4%. Final GDP for Q4 also stands at 1.0%.
Sentiments and levels
The ECB remains dovish, but recent statements by Fed policymakers have been hawkish, calling for a rate hike as early as April. So, the overall sentiment is bearish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.1373, 1.13, 1.1220, 1.1140, 1.1070 and 1.10.
5 Scenarios

  1. Within expectations: 0.7% to 1.3%: In such a scenario, EUR/USD is likely to rise within range, with a small chance of breaking higher.
  2. Above expectations: 1.4% to 1.7%: An unexpected higher reading can push the pair below one support line.
  3. Well above expectations: Above 1.7%: A strong reading would likely boost the dollar, and the pair could break below a second support line as a result.
  4. Below expectations: 0.2% to 0.6%: In this scenario, EUR/USD could push above one resistance level.
  5. Well below expectations: Below 0.2%. A poor reading could result in the pair breaking above a second resistance line.

For more on the euro, see the EUR/USD forecast.

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