EUR/USD Forecast: Inverted Cup and Handle Forms Ahead of EU GDP Data

The EUR/USD is wavering ahead of the important EU GDP data that will come out at 10:00 GMT. The EURUSD is trading at 1.2075, which is slightly above this week’s low of 1.2053. 

What happened: The top catalyst for the EUR/USD will be the EU GDP data by Eurostat. Economists expect the data to show that the European economy rose by 12.7% in the fourth quarter. They also believe that it contracted by about 4.3% on an annualised basis Separately, other statistics agencies in countries like Portugal, Italy, and the Czech Republic will also deliver their GDP estimates.

These numbers will come a day after Markit published strong manufacturing PMI data from the European Union and the United States. Also, the US released strong construction spending numbers. And tomorrow, we will receive the ECB monetary policy statement and EU and US services and composite PMI data.

EUR/USD forecast ahead of EU GDP data

On the four-hour chart, we see that the EUR/USD dropped to a low of 1.2052 yesterday. This was an important level since it was also the lowest level in January this year. The pair has also formed an inverted cup and handle pattern and is also below the 25-day and 15-day moving averages. It is also below the Ichimoku cloud. Therefore, because of the cup and handle pattern, I suspect that the EUR/USD will consolidate at this level before breaking-out lower.

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EURUSD technical chart

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