Euro in focus ahead of GDP numbers

The most dominant theme in the FX space was a risk recovery on speculation central banks will be in no rush to tighten. 

Source: Bloomberg

Disappointing retail sales data set the tone for a weaker USD as it allowed the market to take a dovish view of the Fed funds rate. Another development supporting risk was an extension of the Gaza ceasefire. Soon after the retail sales reading the pair surged to a high of 1.3416, but this was short lived as selling resumed. That 1.3400 barrier seems to be favoured by sellers at the moment and looks like it is presenting the best value trade at the moment. The pair is back in the 1.3360 region and remains sidelined heading into GDP figures later today.

Traders favour selling

Q2 GDP figures are due out later today for Germany, France and the region; there will be some cautious trading in the single currency. While the market is pricing in growth, there is a risk we’ll see a disappointment in these figures with analysts tipping a relatively flat performance for the quarter. A round of disappointing number could present an opportunity to sell the pair on momentum, with key lows to look out for in the 1.3330 region. Once this is broken then the pair could be facing another leg lower. Alternatively, if we see a surprise to the upside, then selling rallies will still be on the cards.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen. 79% van de retailbeleggers lijdt verlies op de handel in CFD’s met deze aanbieder.
Het is belangrijk dat u goed begrijpt hoe CFD's werken en dat u nagaat of u zich het hoge risico op verlies kunt permitteren.
CFD’s zijn complexe instrumenten en brengen vanwege het hefboomeffect een hoog risico mee van snel oplopende verliezen.