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With the Eurozone printing Germany’s GDP and a bunch of lower-tier releases and the U.S. publishing its Q2 GDP report, I’m setting my sights on EUR/USD today.

Where do you think the pair will go?

Before we talk about the setup, check out the major headlines that moved the markets during the Asian session:

Major Forex Pairs Price Performance from MarketMilk
Major Forex Pairs Price Performance from MarketMilk

Fresh Market Headlines & Economic Data:

Upcoming Potential Catalysts on the Economic Calendar:

  • KOF economic barometer at 7:00 am GMT
  • Spain’s flash CPI at 7:00 am GMT
  • Germany’s unemployment change at 7:55 am GMT
  • Germany’s preliminary GDP at 8:00 am GMT
  • ECB’s economic bulletin at 8:00 am GMT
  • Italy’s unemployment rate at 8:00 am GMT
  • Eurozone’s unemployment rate at 8:00 am GMT
  • U.S. advance quarterly GDP at 12:30 pm GMT

What to Watch: EUR/USD

EUR/USD 1-hour Forex Chart
EUR/USD 1-hour Forex Chart

EUR/USD is consolidating in a potential rising wedge after popping up by 500 pips since early July.

Today’s economic releases will tell us if the pattern will end in a reversal for the euro.

Germany is printing its quarterly GDP, which is expected to show a 9.0% contraction in Q2 2020.

Meanwhile, today’s U.S. GDP release can explain why the Fed is maintaining its dovish stance. Markets see the economy contracting by around 35% in Q2 2020 and, unlike in the Eurozone, Fed Chairman Powell has shared that the economy’s path forward is “extraordinarily uncertain.”

A better-than-expected German GDP release would push the euro higher especially since investors are already discounting a technical recession in favor of promising leading indicators from one of the Eurozone’s biggest economies.

A downside surprise, on the other hand, or a better-than-expected U.S. GDP report could inspire dollar-buying and drag EUR/USD below the wedge pattern and the 100 SMA on the 1-hour time frame.