The first estimate of the United States GDP for the first quarter showed a 1.4% year-on-year contraction in the economy. It is worth noting that this is the first decline in the US economy since the second quarter of 2020. Then the decline was caused by the coronavirus pandemic.
Despite the disappointing data, the markets did not pay much attention to the statistics. Perhaps everyone is in anticipation of the upcoming Fed meeting, which will take place next week.
The US jobless claims, which were released at the same time as the GDP data, showed a reduction in volume, but the change was insignificant.
Statistics details:
The volume of continuing claims for benefits decreased from 1.409 million to 1.408 million.
The volume of initial claims for benefits decreased from 185,000 to 180,000.
Analysis of trading charts from April 28The EURUSD currency pair has reached an important support level of 1.0500, where the volume of short positions has decreased. This led to a slowdown in the downward cycle as a result of a technical pullback.
On the trading chart of the daily period, a downward trend is in the active phase, which has broken through a number of important price levels. Based on the current situation in the world, dollar positions will continue to be considered the most attractive.
The GBPUSD currency pair fell below the level of 1.2500 during intensive movement. This signals a high interest of traders in short positions, and they are not afraid of the high level of oversold pound sterling. In fact, this may mean the inertial behavior of the price, in which the technical and fundamental analyses are ignored.
On the trading chart of the daily period, there is a large-scale recovery of dollar positions. The main signal to sell the pound appeared at the moment of the breakdown of the psychological level of 1.3000. The potential of short positions has not yet been exhausted by traders.
Today, the publication of the first estimate of Eurozone GDP for the first quarter is expected, where the data are slightly exaggerated. An acceleration in economic growth from 4.6% to 5.0% was predicted, despite the fact that the situation in the world and Europe does not favor GDP growth. Thus, there is an assumption that the data will come out worse than expected, which will negatively affect the euro exchange rate.
At the same time, data on inflation in the EU will be published, where further growth is expected from 7.4% to 7.5%. This is a negative factor for the economy, which will also put pressure on the European currency.
Time targeting
Eurozone GDP - 09:00 UTC
Eurozone Inflation - 09:00 UTC
Trading plan for EUR/USD on April 29The technical pullback is only a temporary manifestation of the price, the downward mood persists in the market. In order for a new round of the downward cycle to occur, the quote needs to be stable below the 1.0500 level. This will lead to an increase in the volume of short positions and a movement towards the low of 1.0350. Until then, there will be a pullback in the market, which serves as a regrouping of trading forces.
There is currently a technical pullback in the market that serves as a regrouping of trading forces. Over time, the overheating of short positions will subside. This will lead to the subsequent weakening of the pound sterling, which is in line with the main trend.
Market participants consider the psychological level of 1.2000 as a reference point for a downward trend.
A candlestick chart view is graphical rectangles of white and black light, with sticks on top and bottom. When analyzing each candle in detail, you will see its characteristics of a relative period: the opening price, closing price, and maximum and minimum prices.
Horizontal levels are price coordinates, relative to which a stop or a price reversal may occur. These levels are called support and resistance in the market.
Circles and rectangles are highlighted examples where the price of the story unfolded. This color selection indicates horizontal lines that may put pressure on the quote in the future.
The up/down arrows are the reference points of the possible price direction in the future.