EURUSD Break Lower Nears; Will US GDP Be The Trigger?
EURUSD and Talking Points
- The latest ECB monetary policy announcement gave no hints on policy change.
- US Q1 advanced GDP may reveal an upside surprise.
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EURUSD Continues to Trade Heavy and Further Falls May Follow
The take away from the latest ECB monetary policy meeting and press conference is that nothing has changed from the last meeting and that ECB President Mario Draghi is content to let the Euro drift lower, hoping to import inflation. As expected no signs of any timetable for ending the current bond buying program or raising interest rates were given, leaving the single currency in limbo until the next meeting in June and at risk against a strong US dollar.
On Friday the first look at US Q1 GDP - expected at 2% against a prior q/q of 2.9% - with an outside chance of an upside surprise. While the greenback’s strength is primarily due to higher US bond yields in the past weeks, further good news via growth hard data would push the US dollar even higher, at the expense of a weak EUR.
DailyFX senior strategist Christopher Vecchio will be covering US Q1 GDP on Friday from 12:15 GMT.
The charts currently show EURUSD trading below 1.2200 and looking at a gap to fill a gap between 1.2155 and 1.2091, with the 23.6% retracement of the January 2017 – February 2018 rally situated just below at 1.2033. After that the January 2018 swing low at 1.1916 comes into play.
The latest IG Client Sentiment Indicator also adds weight to a further fall in EURUSD with retail traders’ net-long positions sharply higher compared to last week. Download the guide and see how the data can help you make more informed trading decisions.
EURUSD Price Chart Daily Timeframe (August 2017 – April 26, 2018)
What’s your opinion on the EURUSD? Share your thoughts with us using the comments section at the end of the article or you can contact the author via email at Nicholas.firstname.lastname@example.org or via Twitter @nickcawley1
--- Written by Nick Cawley, Analyst
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.