US Preliminary GDP is a measurement of the production and growth of the economy. Analysts consider GDP one the most important indicators of economic activity, and publication of Preliminary GDP could have a significant impact on the movement of EUR/USD. A reading which is higher than the market forecast is bullish for the dollar.
Update: US GDP disappoints, unchanged at 1.9% – USD down
Here are all the details, and 5 possible outcomes for EUR/USD.
Published on Tuesday at 13:30 GMT.
Indicator Background
GDP reports are released quarterly, with Preliminary GDP following the Advance GDP report. Traders should pay particular attention to this economic indicator and treat it as a market-mover.
Advance GDP for Q4 posted a gain of 1.9%, shy of the forecast of 2.1%. The estimate for Preliminary GDP remains at 1.9%.
Sentiments and levels
Eurozone growth and inflation indicators continue to point upwards, which is bullish for the euro. The French elections could inject some volatility in the markets. In the US, there is increasing uneasiness over Trump. So, the overall sentiment is bullish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.0870, 1.0775, 1.0720, 1.0660, 1.06 and 1.0520
5 Scenarios
- Within expectations: 1.4% to 2.3%. In such a scenario, the EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 2.4% to 2.8%: An unexpected higher reading can send the pair below one support line.
- Well above expectations: Above 2.8%: Such an outcome could push EUR/USD downwards, and a second support line might break as a result.
- Below expectations: 2.3% to 2.7%: A weak figure could push the pair higher and break one level of resistance.
- Well below expectations: Below 2.3%. In this scenario, the EUR/USD could move higher and break above a second resistance line.
For more on the euro, see the EUR/USD