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 better than the market forecast is bullish for the dollar.
Update: US GDP revised to 2.1%
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, and provides an excellent indication of the health and direction of the economy in the past quarter. Traders should pay particular attention to this economic indicator and treat it as a market-mover.
Advance GDP for Q3 posted a gain of 1.5% for Q3, very close to the estimate of 1.6%. The upcoming Preliminary GDP for Q3 is expected to be stronger, with an estimate of 2.0%.
Sentiments and levels
Recent comments from the Federal Reserve and the ECB have reaffirmed monetary policy divergence, which could result in drops for the shaky euro. This week’s data, especially from Germany, could add fuel to the fire. So, the overall sentiment is bearish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.0790, 1.0710, 1.0630, 1.0530 and 1.0460.
5 Scenarios
- Within expectations: 1.7% 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 2.7%: 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: 1.4% to 1.8%: A lower GDP figure than predicted could push the pair higher and break one level of resistance.
- Well below expectations: Below 1.4%. 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