EUR/USD Drops to Session Low Ahead of US GDP Release
In last one-hour, the US Dollar seems to have gained traction, leading to a sharp decline for the EUR/USD pair back below 100-day SMA support to currently trade at session low.
In a short-while from now, market will confront today's key event risk, the first revision of US Q1 GDP, where consensus estimates anticipate a sizeable upward revision to the quarterly growth rate from 0.5% to 0.8%. Since majority of the FOMC members have emphasized on data-dependent Fed rate-hike decision, a strong number is likely to trigger a sharp bullish spike for the greenback.
On Friday, the pair extended its reversal from Thursday's intraday high above 1.1200 level and has now broken through 100-day SMA support near 1.1170. Hence, an upbeat US GDP print now seems to accelerate the fall further.
Technical levels to watch
A follow through selling pressure below 1.1150 level seems to accelerate the fall back towards over two-month low level of 1.1130 support, touched on Wednesday. This 1.1130 support coincides with 61.8% Fibonacci retracement level of 1.0830-1.1616 up-swing and hence, a decisive break below this support, leading to a break below a medium-term ascending trend-channel support would open room for continuation of the pair's downward trajectory in the near-term.
Meanwhile on the upside, 1.1200 handle remains immediate key resistance to clear, which if conquered seems to immediately boost the pair towards 1.1240 resistance. The momentum could further get extended towards its next major resistance near 1.1300-15 area.