Saturday, August 1, 2020 7:57 PM EDT
EUR/USD, DAX Analysis & News
- Eurozone GDP Posts Record Contraction, Markets Unfazed
- EUR/USD Puts in Yet Another Strong Performance
EUROZONE GDP POSTS RECORD CONTRACTION, MARKETS UNFAZED
Eurozone GDP posted the largest contraction on record of 12.1% (records began in 1995), slightly below expectations of 12%, while the yearly rate showed a 15% contraction, against expectations of -14.5%. In reaction, the Euro was relatively muted, while the DAX trades at pre-announced levels given that the data is largely looking at the Eurozone economy from a rear view mirror and thus has largely been factored in.
ONE RECORD CONTRACTION IN GDP AFTER ANOTHER
PATH OF RECOVERY IN FOCUS
That said, with Eurozone activity picking up since the depths of the crisis, the focus going forward is on the path of the recovery. Although, with COVID cases beginning to flare up yet again across Europe, that path is at a material risk of stalling and thus, more timely high-frequency data points will be key to watch out for.
EUR/USD PUTS IN YET ANOTHER STRONG PERFORMANCE
Yesterday saw the Euro break above 1.18 to test 1.19 during overnight trade further suggesting that strong momentum remains firm for the Euro. The path of least resistance is higher in EUR/USD, however, as we noted yesterday for the US Dollar, there is a possibility for a healthy correction in the greenback, therefore, there is the potential for the Euro to pullback before another push higher. Although, when that happens exactly is a little more uncertain, perhaps the first approach on 1.20. Elsewhere, given that today is the last trading day of the month, keep in mind that there will be plenty of month-end noise around 1500-1600 BST.
EUR/USD PRICE CHART: WEEKLY TIME FRAME
Source: IG
Disclaimer: DailyFX, the free news and research website from IG, is one of the world's leading sources for news and analysis on the ...
more
Disclaimer: DailyFX, the free news and research website from IG, is one of the world's leading sources for news and analysis on the currency, commodity and index trading community. With nine internationally-based analysts publishing over 30 articles and producing 5 video news updates daily, DailyFX offers in-depth coverage of price action, predictions of likely market moves, and exhaustive interpretations of salient economic and political developments. DailyFX is also home to one of the most powerful economic calendars available on the web, complete with advanced sorting capabilities, detailed descriptions of upcoming events on the economic docket, and projections of how economic report data will impact the markets. Combined with the free charts and live rate updates featured on DailyFX, the DailyFX economic calendar is an invaluable resource for traders who heavily rely on the news for their trading strategies. Additionally, DailyFX serves as a portal to one of the most vibrant online discussion forums in the forex trading community. Avoiding market noise and the irrelevant personal commentary that plague many forex blogs and forums, the DailyFX Forum has established a reputation as being a place where real traders go to talk about serious trading.
Any opinions, news, research, analyses, prices, or other information contained on dailyfx.com are provided as general market commentary and does not constitute investment advice. Dailyfx will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
less
How did you like this article? Let us know so we can better customize your reading experience.