On Thursday the 25th of April, trading on the euro closed 0.2% down. The state of the Eurozone economy is weighing down on the euro, with the strength of the US dollar adding to this pressure. The DXY rose to 98.32, while the euro dropped to June 2017 levels. In the US session, the greenback got a boost from strong data on durable goods orders, which exceeded expectations. Traders are now focused on US GDP data for Q1, so a strong showing will play into the hands of dollar bulls.
Day’s news (GMT 3):
- 11:00 Switzerland: SNB Chairman Jordan’s speech.
- 11:30 UK: BBA mortgage approvals (Mar).
- 13:00 UK: CBI industrial trends survey – orders (Apr).
- 15:30 US: GDP (Q1), GDP price index (Q1).
- 17:00 US: Michigan consumer sentiment index (Apr).
- 20:00 US: Baker Hughes US oil rig count.
Since the beginning of the week, the euro has shed 0.83% against the dollar. In this morning’s Asian session it’s trading up by 0.14%. The market is consolidating ahead of the US GDP report. Markets are expecting a rise of 2.0% against 2.2% in Q4. Considering that last quarter’s report exceeded expectations, market participants are expecting figures well above 2%. Since this is the first reading, volatility should be high.
The pair is trading around the trend line, and the stochastic is in the euro sell zone. Since there’s important data coming out today, the pair should remain within a limited range until 15:30. In my forecast, I expect a drop to 1.1113. Further movements will be decided by the GDP figures. The general feeling is that good GDP figures are already built into the price, so it’s worth expecting a correction before the day is out. This could see a pin bar form on Monday.