Gross Domestic Product (GDP) indicator is a measurement of the production and growth of the economy. Analysts consider GDP one the most important indicators of economic activity. A reading which is better than the market forecast is bullish for the euro.
Here are all the details, and 5 possible outcomes for EUR/USD.
Published on Friday at 6:00 GMT.
Indicator Background
German GDP is released quarterly, and as the largest economy in the Eurozone, German numbers are highly anticipated by the market. An unexpected German GDP reading can have an immediate effect on the movement of EUR/USD.
The Q1 reading slipped to 0.3%, within expectations. The markets are expecting a rise in the Q2 report, with a forecast of 0.5%.
Sentiments and levels
Although we are seeing some improvements in the euro-zone economies, in the bigger picture, the trend remains to the downside and it could resume when Greek talks approach the deadline in the following week. As well, continuing speculation about a Fed rate is good news for the greenback. So, the overall sentiment is neutral on EUR/USD towards this release.
Technical levels, from top to bottom: 1.1373, 1.1290, 1.1190, 1.1050, 1.0863 and 1.0815.
5 Scenarios
- Within expectations: 0.2% to 0.8%. In such a scenario, EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.9% to 1.2%: An unexpectedly strong reading could send the pair above one resistance line.
- Well above expectations: Above 1.2%: The chances of such a scenario are low. Such an outcome would likely push EUR/USD upwards, and a second resistance level might be broken as a result.
- Below expectations: 1.3% to 1.6%: A lower GDP figure than forecast could cause the pair to drop and break one support level.
- Well below expectations: Below 1.3%. In this scenario, EUR/USD could break below a second support level.
For more on the euro, see the EUR/USD.
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