EUR/USD sees thin rebound on quiet Wednesday after European GDP holds steady – Crypto News – Crypto News
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EUR/USD sees thin rebound on quiet Wednesday after European GDP holds steady – Crypto News

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  • EUR/USD recovers from dip into 1.0700, but bullish momentum remains thin.
  • Pan-European GDP figures met already-low expectations.
  • An appearance from ECB President Lagarde and US Retail Sales in the pipe.

EUR/USD found thin footing to stage a rebound from a decline into 1.0700, but the high side is looking far away as the pair remains challenged by bearish flows as the US Dollar (USD) finds broad-market support after US inflation figures on Wednesday spooked market sentiment.

European Gross Domestic Product (GDP) figures met expectations, but a lopsided pan-European economy suffering from lagging growth saw the bar set very close to the floor with investors forecasting a flat growth print.

Daily digest market movers: EUR/USD rebounds from 1.0700, but bearish sentiment weighs heavy

  • European GDP printed at 0.0% for the fourth quarter, as expected.
  • Annualized quarterly euro area GDP showed slim 0.1% growth for the year through the fourth quarter.
  • European Industrial Production showed a healthy uptick to 2.6% in December, well above the forecast -0.2% versus the previous month’s 0.4% (revised from -0.3%).
  • Euro (EUR) traders will be keeping an eye out for European Central Bank (ECB) President Christine Lagarde’s appearance slated for early Thursday.
  • ECB President Lagarde will be testifying before the European Parliament’s Committee on Economic and Monetary Affairs in Brussels at 08:00 am GMT Thursday.
  • US Retail Sales figures are also due Thursday.
  • US Retail Sales in January are expected to decline in January, coming in at -0.1% versus the previous month’s 0.6%.

Euro price today

The table below shows the percentage change of Euro (EUR) against listed major currencies today. Euro was the strongest against the Pound Sterling.

  USD EUR GBP CAD AUD JPY NZD CHF
USD   -0.17% 0.23% -0.17% -0.62% -0.11% -0.50% -0.22%
EUR 0.18%   0.40% 0.01% -0.44% 0.04% -0.31% -0.02%
GBP -0.23% -0.41%   -0.39% -0.84% -0.34% -0.73% -0.44%
CAD 0.17% -0.01% 0.39%   -0.44% 0.05% -0.33% -0.05%
AUD 0.60% 0.44% 0.83% 0.44%   0.48% 0.12% 0.39%
JPY 0.12% -0.07% 0.33% -0.04% -0.51%   -0.39% -0.10%
NZD 0.50% 0.32% 0.72% 0.33% -0.11% 0.31%   0.28%
CHF 0.20% 0.03% 0.43% 0.06% -0.40% 0.09% -0.29%  

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

Technical analysis: EUR/USD recovers to 1.0730 region, further topside limited by technical ceiling

EUR/USD sagged into 1.0700 early Wednesday following Tuesday’s US inflation-fueled tumble, and a near-term recovery sees the pair hampered on the bearish side of the 200-hour Simple Moving Average (SMA) near 1.0760.

EUR/USD is on pace for a fourth straight week of decline, and a bearish Friday close will have the pair close lower for five of the last six consecutive trading weeks. The pair is down around 3.7% from December’s peak bids near 1.1140, and bearish momentum continues to drag the pair further down from the 200-day SMA near 1.0830.

EUR/USD hourly chart

EUR/USD daily chart

GDP FAQs

A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022.
Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.

A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency.
When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.

When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.

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