EURUSD is trading slightly lower in today’s trading following yesterday’s FOMC interest rate decision. As of this writing, the currency pair is down by 0.14% from its opening price as it trades around 1.1774. Could today’s German GDP report help attract bids into EURUSD?
Just as expected, the central bank kept its interest rates unchanged at <0.25%. The central bank’s asset purchase program was also held steady. While Fed President Powell warned that they would not hesitate to ease further until the US economy recovers, the effect on the USD seemed to be limited.
Later today, at 9:00 am GMT, Germany’s preliminary GDP report for Q2 2020 is expected to print a 9.0% contraction. A higher-than-expected reading could be bullish for EURUSD. This is because it could indicate improving economic conditions in the euro zone’s largest economy. On the other hand, a disappointing figure could weigh on EURUSD.
On the 1-hour time frame, it can be seen that EURUSD still has some room to trade lower and still maintain its uptrend. By connecting the lows of July 21, July 23, July 24, and July 29, it can be seen that trendline support is around 1.1760. This price also coincides with the 50% Fib level (when you draw the Fibonacci retracement tool from the low of July 29 to its intraday high). If support at this level does not hold, the next floor could be at yesterday’s low around 1.1717.
On the other hand, if there are still enough buyers left in the market, we may not even see EURUSD retest its trendline before trading higher. Near-term resistance is at 1.1805. If the ceiling there does not hold, the next resistance level could be at 1.1850 where EURUSD topped on June 10, 2018.