News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Mixed
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
USD/JPY
Bullish
More View more
Real Time News
  • Gold Prices Extend Lower as Traders Eye FOMC For Tapering Clues https://www.dailyfx.com/forex/market_alert/2021/06/16/Gold-Prices-Extend-Lower-as-Traders-Eye-FOMC-For-Tapering-Clues.html https://t.co/sHCSAkYvGe
  • MACD who? The Moving Average Convergence Divergence (MACD) is a technical indicator which simply measures the relationship of exponential moving averages (EMA). Find out how you can incorporate MACD into your trading strategy here: https://t.co/ZNs4Qi8ieG https://t.co/LSpzjXyc6W
  • 🇬🇧 Core Inflation Rate YoY (MAY) Actual: 2% Expected: 1.5% Previous: 1.3% https://www.dailyfx.com/economic-calendar#2021-06-16
  • 🇬🇧 Inflation Rate MoM (MAY) Actual: 0.6% Expected: 0.3% Previous: 0.6% https://www.dailyfx.com/economic-calendar#2021-06-16
  • 🇬🇧 Inflation Rate YoY (MAY) Actual: 2.1% Expected: 1.8% Previous: 1.5% https://www.dailyfx.com/economic-calendar#2021-06-16
  • Heads Up:🇬🇧 Inflation Rate MoM (MAY) due at 06:00 GMT (15min) Expected: 0.3% Previous: 0.6% https://www.dailyfx.com/economic-calendar#2021-06-16
  • Heads Up:🇬🇧 Inflation Rate YoY (MAY) due at 06:00 GMT (15min) Expected: 1.8% Previous: 1.5% https://www.dailyfx.com/economic-calendar#2021-06-16
  • Heads Up:🇬🇧 Core Inflation Rate YoY (MAY) due at 06:00 GMT (15min) Expected: 1.5% Previous: 1.3% https://www.dailyfx.com/economic-calendar#2021-06-16
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/t9Flsqcxo9 https://t.co/WZPjlgoE0T
  • (Sentiment Weekly) S&P 500, Dow Jones Analysis: Rising Long Exposure Seems Ominous With Fed Nearing #SP500 #DowJones #Fed https://www.dailyfx.com/forex/technical/article/special_report/2021/06/16/SP-500-Dow-Jones-Analysis-Rising-Long-Exposure-Seems-Ominous-With-Fed-Nearing.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/gIUD0ZBtJW
EUR/USD to Eye Former Support on Dismal U.S. 1Q GDP

EUR/USD to Eye Former Support on Dismal U.S. 1Q GDP

David Song, Strategist

- U.S. Final 1Q GDP Print to Show Another Downward Revision/Larger Contraction.

- 1.8% Decline Would Mark the Biggest Drop Since 1Q 2009 (-5.4%).

Trading the News: U.S. Gross Domestic Product (GDP)

The final 1Q Gross Domestic Product (GDP) report may heighten the bearish sentiment surrounding the U.S. dollar as market participants anticipate another downward revision in the growth rate.

What’s Expected:

EUR/USD 1Q GDP

Why Is This Event Important:

A more meaningful decline in the growth rate may spark a bearish reaction in the greenback (bullish EUR/USD) as it gives the Federal Reserve greater scope to retain its highly accommodative policy stance, and the reserve currency may face additional headwinds throughout the summer months as central bank Chair Janet Yellen continues to endorse a dovish tone for monetary policy.

For LIVE SSI Updates Ahead of the U.S. GDP Print, Join DailyFX on Demand

Expectations: Bearish Argument/Scenario

Release

Expected

Actual

Building Permits (MoM) (MAY)

-0.9%

-6.4%

Housing Starts (MoM) (MAY)

-3.9%

-6.5%

ISM Manufacturing (MAY)

55.5

55.4

The ongoing slack in business outputs paired with the slowdown in housing activity may prompt a larger-than-expected decline in 1Q GDP, and a dismal print may generate a more meaningful rebound in the EUR/USD as the data drags on interest rate expectations.

Risk: Bearish Argument/Scenario

Release

Expected

Actual

Consumer Credit (APR)

$15.000B

$26.847B

Change in Non-Farm Payrolls (MAY)

215K

217K

Durable Goods Orders (APR)

-0.7%

0.8%

However, stronger job growth along with the pickup in private sector credit may have helped to limit the downturn in economic activity, and a positive development may generate a bullish outlook for the greenback as it puts increased pressure on the Fed to normalize monetary policy sooner rather than later.

How To Trade This Event Risk(Video)

Bearish USD Trade: U.S. 1Q GDP Contracts 1.8% or Greater

  • Need green, five-minute candle following the GDP print to consider a long EUR/USD trade
  • If market reaction favors a bearish dollar trade, long EUR/USD with two separate position
  • Place stop at the near-by swing low/reasonable distance from entry; look for at least 1:1 risk-to-reward
  • Move stop to entry on remaining position once initial target is hit, set reasonable limit

Bullish USD Trade: Growth Rate Exceeds Market Expectations

  • Need red, five-minute candle to favor a short EUR/USD trade
  • Implement same setup as the bearish dollar trade, just in opposite direction

Potential Price Targets For The Release

EUR/USD Daily

EUR/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Continues to Threaten Trendline Resistance; Bullish Breakout Brings Up June High (1.3676)
  • Interim Resistance: 1.3650 (78.6% expansion) to 1.3670 (61.8% retracement)
  • Interim Support: 1.3490 (50.0% retracement to 1.3500 Pivot

Read More:

Price & Time: Quarter-End A Catalyst For Volatility?

Crude Oil Volatility To Continue, Platinum Exposed To Strike Deal

Impact that U.S. GDP has had on EUR/USD during the last quarter

Period

Data Released

Estimate

Actual

Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

4Q F 2014

03/27/2014 12:30 GMT

2.7%

2.6%

+10

-18

4Q F U.S. Gross Domestic Product (GDP)

EUR/USD to Eye Former Support on Dismal U.S. 1Q GDP

The final 4Q GDP report showed an upward revision in the growth rate as the U.S. economy expanded an annualized 2.6% amid an initial forecast of 2.4%. The greenback struggled to hold its ground following the release as the EUR/USD climbed towards the 1.3775 region, but the dollar regained its footing during the North American trade, with the pair ending the day at 1.3739.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

To be added to David's e-mail distribution list, please follow this link.

Trade Alongsidethe DailyFX Team on DailyFX on Demand

Looking to use the DailyFX Trade Signals LIVE? Check out Mirror Trader.

New to FX? Watch this Video

Join us to discuss the outlook for the major currencies on the DailyFXForums

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

DISCLOSURES