US Advance GDP is a key release and is published each quarter. Advance GDP measures production and growth of the economy, and is considered by analysts as one the most important indicators of economic activity. A reading which is higher than the market forecast is bullish for the dollar.
Here are all the details, and 5 possible outcomes forEUR/USD.
Published on Wednesday at 12:30 GMT.
Indicator Background
Advance GDP is the first of three versions and has the most impact on the movement of EUR/USD. Traders should pay close attention to the GDP release, as an unexpected reading could quickly affect the direction of EUR/USD.
US Final GDP slipped in Q4 to 2.2%, within expectations. The markets are expecting a softer reading for Advance GDP in Q1, with an estimate of 1.0%.
Sentiments and levels
The euro couldn’t do much last week despite horrible US data, a clear sign that the currency is struggling. In addition to the determined ECB on QE, Eurozone data remains soft. Assuming that US Advance GDP meets expectations, there is room for EUR/USD to fall. So, the overall sentiment is bearish on GBP/USD towards this release.
Technical levels, from top to bottom: 1.1050, 1.10, 1.0910, 1.0815, 1.0760, and 1.0660.
5 Scenarios
- Within expectations: 0.7% to 1.3%: In such a scenario, EUR/USD is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 1.3% to 1.7%: An unexpected higher reading can push the pair below one support line.
- Well above expectations: Above 1.7%: A surge in the reading would likely boost the dollar, and the pair could break below a second support line as a result.
- Below expectations: 0.2% to 0.6%: In this scenario, EUR/USD could push above one resistance level.
- Well below expectations: Below 0.2%. A very weak reading could lead to the pair breaking above a second resistance line.
