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Markets Stay Quiet Between Draghi's Comments and US 2Q GDP

Markets Stay Quiet Between Draghi's Comments and US 2Q GDP

Benjamin Spier, Technical Strategist

It’s been a quiet European session as traders take a breather from yesterday’s giant Euro rally following European Central Bank President Draghi’s pro-Euro comments. After trading below the 1.2300 line through the North American session and overnight, EURUSD fell 50 points this morning as the Spanish unemployment rate was reported at 24.6%, the highest on record. However, the Spanish unemployment was still slightly lower than the expected 24.7% rate, and the price correction coinciding with the Spanish unemployment numbers could have just been a coincidence.

EURUSD could find support by the 50% expansion from May’s high to June’s low at 1.2234, and resistance could continue to be provided by the psychological 1.2300 line.

In other European news, the KOF leading indicator found that the Swiss economy will continue to grow at a faster momentum, however this did not affect CHF trading.

The big market mover today could be the US GDP for the second quarter, which will be released at 12:30 GMT. A result that is better than the expected 1.4% growth for the quarter could boost the market’s risk appetite and be positive for the Euro. Also, the consumer price index for Germany will be released at 12:00 GMT and a 1.7% annual inflation rate is expected for July.

EURUSD5-minute: July 27, 2012

Markets_Stay_Quiet_Between_Draghis_Comments_and_US_2Q_GDP_body_eurusd_daily_chart.png, Markets Stay Quiet Between Draghi's Comments and US 2Q GDP

--- Written by Benjamin Spier, DailyFX Research

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.