FX.co ★ Trading plan for EUR/USD and GBP/USD on December 8

The third estimate of the EU GDP for Q3 2022 stands at a slightly higher level than in the first two estimates. The EU economic output slowed down its annual growth to 2.3% from 4.2% in Q2 2022. The previous estimates suggested a decline to 2.1% on year. However, the EU GDP for Q2 2022 was downgraded to 4.2% from the unrevised 4.3% which muted the overall positive sentiment. Thus, the euro's growth comes as no surprise. In parallel, the pound sterling also regained its footing. The bottom line is that the EU GDP went down to a slightly less degree, so the reading is an uptick higher than in the previous estimates. Nevertheless, economic growth in the Eurozone has been shrinking.

EU Gross Domestic Product, y/y

At the same time, things are not so smooth in the US. For example, the situation in the labor market has been getting worse for two months in a row. Today the data on unemployment claims are likely to print a higher figure. The number of first-time jobless claims could have increased by 15,000. The number of continuing unemployment claims, which are given top priority, has been growing for 8 weeks straight. The data today might log an increase for the ninth time. Certainly, this does not add to the US dollar's confidence. The thing is that the greenback is still strongly oversold. So, its minor downward correction is imminent.

US Continuing Unemployment Claims

EUR/USD rebounded to levels above 1.0500 as a result of a local surge in ling positions. Market participants are poised to remain bullish about the euro. This might open the door to a new jump. The first buyers' target is the level of 1.0550 which is a realistic scenario for the short term.

As for GBP/USD, the pair is following a similar scenario. The instrument slowed down its retracement at around 1.2150. The price got stuck and developed another retracement. If the price settles above 1.2240, this will set the stage for the sterling's growth.