USD GDP: What to Expect of EUR/USD
The main highlight in today’s US docket will be the release of another revision of the GDP figures for the first quarter. Market consensus expects the economy to have expanded at an annualized pace of 0.9%, up from the previous 0.5% gain.
The release has gathered unusual relevance in light of the ongoing recovery in the greenback and recent comments by FOMC governors, reiterating the data-dependent stance of the Federal Reserve and in turn putting a rate hike in June back on the table. Strategists at TD Securities argued “With the recent hawkish rhetoric from Fed and stronger economic data a precursor to a second hike, a significant upward revision would help to improve confidence in a June/July move”.
Regarding EUR/USD, spot is trading on a negative bias today, eroding part of the recent upside beyond the 1.1200 handle, following a pullback in crude oil prices and a pick up in the buying interest in USD. The next up move appears in the mid-1.1200s followed by the 1.1300 neighbourhood, home of the 55-day sma. On the downside, the area of recent lows at 1.1130 emerges as the initial target seconded by the 200-day sma around the 1.1100 mark.