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US Final GDP data expectations and EURUSD analysis
22/12/2016
US Final GDP data expectations and EURUSD analysis

Real gross domestic product increased at an annual rate of 3.2% in the third quarter of 2016, according to the second estimate released by the Bureau of Economic Analysis. The following is US Final GDP data expectations and EURUSD technical analysis.

22 December, AtoZForex  The Real US gross domestic product (GDP) is the value of all goods and services produced by the US economy and less the value of the goods and services used up in production. The markets are turning their attention to the Final US GDP forecast, which will be released at 3:30 pm EET. The Bureau of Economic Analysis reported initially that the US economy grew 2.9% in the third quarter.

However, the original GDP estimate is expected to be revised to 3.3%. Financial analyst at Orbex John Benjamin commented:

“No matter how the data comes out, the GDP print, especially at a third revision, is unlikely to move the markets unless there is a big surprise that is not already discounted in the markets. Instead of the GDP, the focus will be on the other data coming out, namely the personal consumption expenditure for the month of November and personal income and spending data.”

Do not neglect the PCE data

Moreover, John Benjamin advises traders not should to only focus on the US final GDP data:

“The PCE is another measure of inflation, especially one that the Fed follows closely. The PCE data will most likely move the dollar in the short term if the actual figures are hawkish than expected. Forecasts are for a 0.1% increase on both the core and headline data on a month over month basis. This would put the year over year rate at 1.8% and 1.5% respectively which should be consistent with the Fed’s tightening cycle, albeit still short of the 2% inflation goal. Furthermore, personal incomes and spending will also be released and could shed light on the pace of growth in the fourth quarter.”

EURUSD technical analysis into US GDP data

From a trading perspective, we can see from 1H chart the pair is trending above 20sma and 100sma. However, the pair is currently trending at 1.0450 level which acted as a major resistance area yesterday. The overall trend for this pair bearish and we can expect bearish move after the announcement today at 3:30 pm EET. Therefore, a break above 1.0480 level will give us a ride towards to 1.0500-1.0520 zone. Hence, a break below 1.0420 will give us the opportunity to see yesterday lows at 1.0390 level.

US Final GDP data expectations and EURUSD analysis

Hourly EURUSD technical analysis into Final US GDP data (click to zoom in)

Financial analyst at Orbex John Benjamin added:

“For the U.S. dollar today’s data will be a short term risk that could trigger a small correction. But beyond this, do not expect any strong movements from today’s datasets. The U.S. dollar index is now into its fifth day of consolidation, stuck within the December 15 range, briefly posting a spike to the upside before settling back into the range of 103.53 – 102.09. What this means for EURUSD is that the current strength to the upside could continue. It is best to stay out from entering any new trades at the current levels. As the markets could easily whipsaw and trap any new and weak positions in either direction ahead of the release.

For the EURUSD, watch the technical resistance at 1.0460 – 1.0475, which could potentially push price lower. Support is seen at 1.0390 – 1.0375 which could see the formation of an inverse head and shoulders pattern. A reversal near 1.0390 – 1.0375 will no doubt send EURUSD higher, back to the 1.0460 – 1.0475 resistance. Followed by a continuation towards 1.0525, completing the inverse head and shoulder’s measured move to the upside.”

What are you US Final GDP data expectations? Share your view in the comments section bellow.

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