February 23, 2024

EUR/USD Tries to Gain Ground Close to 1.0800 Before GDP Numbers Come In, Looks Out for ECB Policy

A Halt in Previous Advances 

The EUR/USD trading pair has seen a halt on its advancing path close to the 1.0800 zones following its heavy bleeding in the past five trading sessions or so. The pause cannot be tagged as a reversal just yet as it would be too early since there is no fundamental change in the geopolitical situation militating against the global financial market. This could become a time or price pullback, which could later result in a totally new downward trend movement in the days ahead.

EUR/USD price chart. Source TradingView

Incoming GDP Figures

For the time being, the fragility has taken a short pause as most investors have decided to wait for the publication of the quarterly and annual Gross Domestic Product figures by Eurostat. With regards to speculations on the street and unofficial analysis, the quarterly and annual Gross Domestic Product figures are possibly going to print on the path of the initial percentages at 0.3% and 4.6%, respectively.

As an addition to the Gross Domestic Product figures, the data on employment changes are also expected to be published on Tuesday. Likewise, the quarterly and annual employment changes are speculated to be similar to the initial prints at 0.5% and 2.1%, respectively. 

For a couple of weeks now, the Euro has been vulnerable in the market when compared with the US dollar. The raging war between Russia and Ukraine has continued to pose a direct threat of an economic recession across Europe. Aside from that, the European Union is strongly considering cutting off Russian gas importation by up to two-thirds of its annual consumption, in line with the United States resolution to ban the importation of Russian crude oil.

Meanwhile, the US dollar index has dropped close to 99.00 after just a tiny opening in the market’s risk appetite of market players. Moreover, investors seem to be paring their investment positions before the publication of the American Consumer Price Index figures.

There are a number of events in the week for the Euro to look forward to. After seeing the Gross Domestic Product figure as well as the employment change report on Tuesday, the focus of investors and the entire market will be fixed on the big event when the European Central Bank makes a decision on increasing interest rates which is due for Thursday.

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