EURUSD Finds Major Resistance Amid Surging Potential GDP Growth in the United States
EURUSD Forecast – 26th May 2021
Eurozone – German Final GDP
On Tuesday, at GMT 6:00 a.m., the Destatis will release the quarter-over-quarter German Final GDP figure. It measures the changes in the value of all products and services produced by the German economy. However, it is inflation-adjusted in order to provide more accurate data.
CFD brokers consider the German GDP to be one of the most vital fundamental indicators of measuring the production in the Eurozone economy. Because the German economy makes up a large part of the entire Eurozone economic activities.
Last quarter, the German final GDP grew by -1.7%. This quarter, analysts are expecting it to go down by -1.7% as well.
United States – Preliminary GDP
On Tuesday, at GMT 12:30 p.m., the US Bureau of Economic Analysis will release the national quarter over quarter Preliminary GDP figure. It measures the changes in the value of all goods and service produced by the American economy during the last quarter. This figure is usually published after adjusting inflation and it is considered as one of the key leading economic indicators.
The preliminary GDP figure comes out before the actual figure. Hence, it usually has the highest market impact. Forex traders consider it to be a leading indicator of the American economy.
Last quarter, the Preliminary GDP came out at 6.4%. The forecast for this quarter is that it will increase by 6.4% once again.
The EURUSD remained in a strong uptrend over the last month. After it tested the support near 1.7000 on March 31, 2021, the pair moved up by around 4.6% to 1.2250. Over the last few days, it continued to test the resistance near 1.2250 but failed to close above it. Currently, it is trading just below this major resistance. On the downside, the EURUSD will likely find support near the 1.2150 level, which was the high point of April 29, 2021.
The US Prelim GDP will likely increase by 6.4% once again, indicating a strong rebound. By contrast, the German final GDP will likely go down by -1.7%. Also, the US inflation figure last month indicate that the Federal Reserve will likely hike rates much sooner than anticipated. We believe it would set a bearish fundamental outlook for the EUR/USD this week. Therefore, if the EURUSD closes below the support near 1.2150, it would likely attract additional bearish momentum in the market.
Hence, CFD traders should look out for trading opportunities below this major support level of around 1.2150.
Market Analyst / Trading Consultant . Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at email@example.com