Statistics on the US GDP Will Determine Sentiments on Majors

Since the beginning of this week, the US dollar has continued to strengthen against the basket of world currencies. The dollar index (#DX) reached a two-month high. This is due to the positive dynamics of the US government bonds. For the first time in a long period, the indicator exceeded the 3% mark. Additional support is provided by optimistic economic reports and weakening of geopolitical risks.

Currently, the majors are consolidating. Investors took a wait-and-see attitude before the publication of the US GDP report on Friday, April 27. Experts expect that in the first quarter of 2018, the US economy growth will slow down to 2.0% compared with the previous value of 2.9%.

US GDP Growth
Source: tradingeconomics.com

Nevertheless, we do not exclude that the indicator may exceed market expectations. We recommend paying attention to the difference between the actual values and the forecasted ones. This report can have a significant impact on the further alignment of forces on major currency pairs and affect the Fed's views regarding the interest rate increase.

Meet probabilities
Source: cmegroup.com
The analysis of the CME exchange data (Chicago Mercantile Exchange) allowed to distinguish the option levels of major players' interest for April 06 – May 04:
  • The resistance zone – 1.2400-1.2500
  • The support zone – 1.1950-1.2050
  • The option balance level – 1.2225
EUR/USD Pattern

At the moment, the EUR/USD currency pair is below the option balance level of 1.2225, which indicates the bearish sentiment. The MACD histogram also signals the power of the sellers. The trading instrument is tending to reduce.

If the price fixes below the local support level of 1.21750, the EUR/USD quotations are expected to fall. The movement is tending to the monthly control zone of 1.1950-1.2050.

Alternative option. If the report on the US GDP turns out to be weak, the EUR/USD currency pair may again test the round level of 1.23000.

When tracking positions, one should use a trailing stop.

by JustMarkets, 2018.04.26

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

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