Eurusd Dips On Strong Us Gdp

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Eurusd Dips On Strong Us Gdp

Eur/Usd Dips On Strong Us Q2 Gdp

EUR/USD initially rose to 1.0860 but ended up giving some of its gains after the release of strong US GDP (Q2). The data from the US showed that the GDP growth during Q2 was 2.8%, higher than the forecast of 2.0%.

The Q2 GDP was also above the previous reading of 1.4% (annual) and showed a positive trend. After the results, the DXY (US Dollar index) turned higher towards 104.50, as the recent data is likely to dent the odds of a September rate cut.

Us Economy Registers Robust Growth

The Q2 GDP data made it clear that the growth remains robust in the US economy. However, the data also showed a decline in the GDP price index, from 3.1% to around 2.3%. This has eased the fears that inflation might make a come back and lead to higher rates for longer.

According to the FedWatch tool, the chances of a September rate cut are still very high. As for the total rate cuts in 2024, the number is still standing at two.

Meanwhile, June's durable goods orders have shown a rather steep decline. For instance, new orders (durable goods) show a contraction of 6.6%. According to economists, the data was expected to show a +0.3% reading against May's print of 0.1%.

Technical analysis shows that EUR/USD has gone inside the triangle pattern on the D1 after failing to stage a breakout. The pair have already started to trade below the 20 EMA, and it is present at nearly 1.0840. Given the recent price action, the EUR/USD is highly likely to drop towards the nearest support at 1.0800 and then 1.0700.

As for the momentum indicators, they have also turned in favor of the US Dollar following the release of the US Q2 GDP data.

On the way up, the next important resistance for the EUR/USD is at 1.0900 and then near 10930. Once the Euro bulls clear these hurdles, a trend shift from bearish to bullish will be signaled.

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