FX.co ★ EUR/USD analysis for February 02, 2021 - Breakout of the HSS pattern and potentia lfor bigger drop towards 1.1800

Prior (Q3) +12.5%; revised to +12.4%

• Q4 GDP -5.1% vs -5.3% y/y expected
• Prior (Q3) -4.3%

The initial reading is a little better than estimates but this still shows that the euro area economy shrank in the final quarter of last year amid tighter virus restrictions. Similar conditions are playing out so far in Q1 and that sets up a likelihood of a double-dip recession to follow, although vaccine optimism is largely overshadowing that for now.

Further Development

Analyzing the current trading chart of EUR, I found that sellers are in control and that there is the breakout of the larger head and shoulders pattern, whch is good sign for further short-term downside movement.

Key Levels:

Resistance: $1,982

Support levels: $1,969, $1,961 and $1,942