Eurozone flash GDP/ German ZEW Overview

The second reading of the Eurozone second-quarter GDP figures for 2018 is due later today at 0900GMT. The consensus amongst traders expects the bloc’s economic growth to remain steady at 0.3% inter-quarter in Q2, while on an annualized basis, is also seen unchanged at 2.1%.

At the same time, the ZEW will release Germany’s Economic Sentiment Index for the next six months as well as the Current Situation Index in the EU session, reflecting the institutional investors’ opinions.

The headline economic sentiment index is expected to drop to -20.0 in August versus -24.7 last while the current situation sub-index is also likely to ease to 72.3 versus 72.4 booked in July.

 How could affect EUR/USD?

Should the Euro area macro news better estimates, the EUR bulls could extend control, pushing the EUR/USD pair back above the 1.1450 mark. However, the spot could stall its recovery-mode and drop back below the 1.1400 level should the data disappoint.    

In terms of technicals, “EUR/USD has broken down from its converging triangle and practically reached the 200-week moving average at 1.1360. Between it and the November 2016 high at 1.1300, we expect the currency pair to at least short-term stabilize. Good resistance comes in at the May and June lows at 1.1508/10. On the topside, the key level is 1.1790, the July peak, a recovery above which would target the 38.2% Fibonacci retracement at 1.1855. Above 1.1855 we would look for a deeper retracement to the 55-week moving average at 1.1935 with scope for the 200-day moving average at 1.1976 to be touched as well. There we would suspect the cross to fail, though,” Karen Jones, Analyst at Commerzbank notes.

Key Notes

EURUSD, Weak rally keeps sentiment negative

EUR/USD Forecast: Remains vulnerable to test sub-1.1300 level, Euro-zone macro data eyed

About Eurozone flash GDP

The Gross Domestic Product released by the Eurostat is a measure of the total value of all goods and services produced by the Eurozone. The GDP is considered as a broad measure of the Eurozone economic activity and health. Usually, a rising trend has a positive effect on the EUR, while a falling trend is seen as negative (or bearish).

About German ZEW

The Economic Sentiment published by the Zentrum für Europäische Wirtschaftsforschung measures the institutional investor sentiment, reflecting the difference between the share of investors that are optimistic and the share of analysts that are pessimistic. Generally speaking, an optimistic view is considered as positive (or bullish) for the EUR, whereas a pessimistic view is considered as negative (or bearish).