The U.S. is printing the first reading of its Q2 GDP!
How will USD pairs react? Will the release affect EUR/USD’s short-term downtrend?
Before moving on, ICYMI, yesterday’s watchlist checked out a confluence of inflection points on GBP/AUD’s 1-hour chart. Be sure to check out if it’s still a valid play!
And now for the headlines that rocked the markets in the last trading sessions:
Fresh Market Headlines & Economic Data:
Inflation, defense aircraft purchases push U.S. core durable goods 1.9% higher vs. 0.8% expected in June
U.S. pending home sales plunge by 8.6% in June as demand is weighed down by surging mortgage rates
EIA: U.S. crude stockpiles drop as exports surge to record high last week
As expected, Fed hikes rates by 75bps to 2.25%-2.5% range, the highest since December 2018Powell: The path [to a soft landing] has clearly narrowed and may narrow further
Powell: Another “unusually large” increase in interest rates may be appropriate in September
Powell: It will likely become appropriate to “slow the pace of increases” while assessing impact of policy adjustments
Powell: Time to go to a meeting by meeting basis and not provide clear guidance
Australia’s retail sales momentum slowed from 0.9% to 0.2% in June
Upcoming Potential Catalysts on the Forex Economic Calendar:
U.S. advance GDP at 12:30 pm GMT
U.S. initial jobless claims at 12:30 pm GMT
U.S. Treasury Sec Yellen to give a speech in DC today
Tokyo’s core CPI at 11:30 pm GMT
Japan’s unemployment rate at 11:30 pm GMT
Japan’s industrial production at 11:50 pm GMT
Japan’s retail sales at 11:50 pm GMT
AU quarterly PPI at 1:30 am GMT at 5:00 am GMT (Jul 29)
Japan’s consumer confidence at 5:00 am GMT (Jul 29)
Use our new Currency Heat Map to quickly see a visual overview of the forex market’s price action! 🔥 🗺️
What to Watch: EUR/USD: 1-hour
EUR/USD 1-hour Forex Chart
If you didn’t catch enough action from the Fed’s interest rate increase, then today’s U.S. advance GDP release might get you a pip or two.
Markets see Uncle Sam growing by 0.4% in Q2 after contracting by 1.6% in Q1 but some predict that the economy will print its second negative growth this week.
Two consecutive negative growth quarters would put the U.S. economy in a technical recession!
As you can see, EUR/USD is trading at the top of a descending channel right when the 100 SMA crossed below the 200 SMA on the 1-hour time frame.An upside surprise would work in favor of those who have already spotted EUR/USD’s short-term downtrend. EUR/USD could drop below the SMAs and revisit the 1.0100 previous support zone.
But what if today’s numbers encourage risk-taking?
If the U.S. narrowly avoids a technical recession, then we could see more of the risk-taking and anti-USD theme that we’ve been seeing this week.
EUR/USD could bust above its channel resistance and target previous areas of interest like 1.0270 or 1.0350.
Don’t even think of missing today’s release!
