German Preliminary 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 Tuesday at 7:00 GMT.
Indicator Background
German GDP is released quarterly. As the largest economy in the Eurozone, German GDP is highly anticipated by the market and can have a significant effect on the movement of EUR/USD.
German GDP dropped to 0.4% in Q2, but this figure beat the estimate of 0.3%. The estimate for Q3 stands at 0.3%.
Sentiments and levels
The US dollar has posted broad gains in the wake of the Trump victory and the euro continues to lose ground. Weak GDP and inflation data as well as gloomy words from Draghi could push the pair even lower. So, the overall sentiment is bearish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.0960, 1.0850, 1.0780, 1.0710, 1.0520 and 1.0460.
5 Scenarios
- Within expectations: 0.0% to 0.6%. In such a scenario, EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 0.7% to 1.1%: A strong reading could send the pair above one resistance line.
- Well above expectations: Above 1.1%: 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: -0.5% to -0.1%: A contraction in GDP could cause the pair to drop and break one support level.
- Well below expectations: Below -0.5%. A sharp contraction in growth could push EUR/USD below a second support level.
For more on the euro, see the EUR/USD.