EUR/USD. May 16. Eurozone GDP for the second quarter unchanged
May 16, 2023 2:23 pm
On Tuesday, the EUR/USD pair continued its weak growth after rebounding from the corrective level of 61.8% (1.0843) toward the Fibonacci level of 76.4% (1.0917). A rebound in quotes from this level will favor the US currency and the resumption of the fall back to 1.0843. Consolidation of the pair rate above the descending trend corridor will increase the chances of continued growth and change the mood of traders back to “bullish.”
Today’s information background promises to be very interesting. Traders’ activity in the first half of the day was low, but there were few important events. There will be more in the second half. For now, we can be satisfied with the second estimate of the EU’s GDP in the first quarter, which has remained the same compared to the first estimate. The economic sentiment index in Germany has also been released, but it has even fewer interested traders. Thus far, there have been no significant reports. The GDP report is always released in three estimates, which very rarely differ from each other. The most important are the first and third estimates. The EU’s economy in the first quarter so far shows growth of 0.1% q/q, which is certainly disappointing, but it should not be forgotten that the ECB continues to raise the interest rate. Accordingly, the low GDP rate is easily explained.
Over the past week, the European currency has lost its advantage in the market but has not lost its high position. There are enough sell signals now, so I expect a further euro decline. The key point is going beyond the ascending trend corridor on the 4-hour chart.
On the 4-hour chart, the pair has secured below the ascending trend corridor and below the corrective level of 50.0% (1.0941), which allows us to expect a continuation of the decline in the direction of the next corrective level of 38.2% (1.0610). The consolidation of quotes above the level of 1.0941 will favor the euro currency and the resumption of growth towards the level of 1.1273. No emerging divergences are observed today with any of the indicators.
Commitments of Traders (COT) report:
During the last reporting week, speculators opened 13,503 long contracts and 7,570 short contracts. The sentiment among major traders remains “bullish” and continues to strengthen overall. The total number of long contracts concentrated in the hands of speculators now amounts to 260 thousand, and the number of short contracts – only 81 thousand. The European currency has been growing for over half a year, but the information background only sometimes supports the pair’s growth. At the last meeting, the ECB lowered the rate increase step to 0.25%, which casts doubt on the further growth of the European currency. The difference between the number of long and short contracts is threefold, which speaks of the proximity of the moment when the bears will take the offensive. So far, a strong “bullish” sentiment has been maintained, but I think the situation will start to change soon. In recent weeks, the euro has maintained high positions but has not grown further.
News calendar for the US and the European Union:
EU – GDP for the first quarter (09:00 UTC).
US – Retail Sales Volume (12:30 UTC).
US – Industrial Production Volume (13:15 UTC).
EU – ECB President Lagarde will deliver a speech (14:00 UTC).
On May 16, the calendar of economic events contains several important entries. I advise you to use the retail sales report and Lagarde’s performance. The influence of the information background on the mood of traders for the rest of the day may be of medium strength.
Forecast for EUR/USD and advice for traders:
Sales of the pair could be opened when closing below the level of 1.0917 on the hourly chart with a target of 1.0843 (worked out). New sales at a rebound from the level of 1.0917 or when closing below 1.0843 with the target at the nearest level. Purchases were possible at a bounce from the level of 1.0843 on the hourly chart with a target of 1.0917, but I would not count on strong euro growth now.
The material has been provided by InstaForex Company – www.instaforex.com
On Tuesday, the EUR/USD pair continued its weak growth after rebounding from the corrective level of 61.8% (1.0843) toward the Fibonacci level of 76.4% (1.0917). A rebound in quotes from this level will favor the US currency and the resumption of the fall back to 1.0843. Consolidation of the pair rate above the descending trend corridor will increase the chances of continued growth and change the mood of traders back to “bullish.”
Today’s information background promises to be very interesting. Traders’ activity in the first half of the day was low, but there were few important events. There will be more in the second half. For now, we can be satisfied with the second estimate of the EU’s GDP in the first quarter, which has remained the same compared to the first estimate. The economic sentiment index in Germany has also been released, but it has even fewer interested traders. Thus far, there have been no significant reports. The GDP report is always released in three estimates, which very rarely differ from each other. The most important are the first and third estimates. The EU’s economy in the first quarter so far shows growth of 0.1% q/q, which is certainly disappointing, but it should not be forgotten that the ECB continues to raise the interest rate. Accordingly, the low GDP rate is easily explained.
Over the past week, the European currency has lost its advantage in the market but has not lost its high position. There are enough sell signals now, so I expect a further euro decline. The key point is going beyond the ascending trend corridor on the 4-hour chart.
On the 4-hour chart, the pair has secured below the ascending trend corridor and below the corrective level of 50.0% (1.0941), which allows us to expect a continuation of the decline in the direction of the next corrective level of 38.2% (1.0610). The consolidation of quotes above the level of 1.0941 will favor the euro currency and the resumption of growth towards the level of 1.1273. No emerging divergences are observed today with any of the indicators.
Commitments of Traders (COT) report:
During the last reporting week, speculators opened 13,503 long contracts and 7,570 short contracts. The sentiment among major traders remains “bullish” and continues to strengthen overall. The total number of long contracts concentrated in the hands of speculators now amounts to 260 thousand, and the number of short contracts – only 81 thousand. The European currency has been growing for over half a year, but the information background only sometimes supports the pair’s growth. At the last meeting, the ECB lowered the rate increase step to 0.25%, which casts doubt on the further growth of the European currency. The difference between the number of long and short contracts is threefold, which speaks of the proximity of the moment when the bears will take the offensive. So far, a strong “bullish” sentiment has been maintained, but I think the situation will start to change soon. In recent weeks, the euro has maintained high positions but has not grown further.
News calendar for the US and the European Union:
EU – GDP for the first quarter (09:00 UTC).
US – Retail Sales Volume (12:30 UTC).
US – Industrial Production Volume (13:15 UTC).
EU – ECB President Lagarde will deliver a speech (14:00 UTC).
On May 16, the calendar of economic events contains several important entries. I advise you to use the retail sales report and Lagarde’s performance. The influence of the information background on the mood of traders for the rest of the day may be of medium strength.
Forecast for EUR/USD and advice for traders:
Sales of the pair could be opened when closing below the level of 1.0917 on the hourly chart with a target of 1.0843 (worked out). New sales at a rebound from the level of 1.0917 or when closing below 1.0843 with the target at the nearest level. Purchases were possible at a bounce from the level of 1.0843 on the hourly chart with a target of 1.0917, but I would not count on strong euro growth now.
The material has been provided by InstaForex Company – www.instaforex.com
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