In yesterday’s article, we looked at the rather busy data outlay for this week, key of which is a series of European prints that could provide that next boost of motivation to the single currency. Earlier this morning brought the first of those data points to the fray, as German GDP numbers for Q2 were released. This was the first read of 2nd quarter GDP growth, and Europe’s largest economy grew by .6%, which was below the estimate of .7%. But – this does keep Germany on pace for the economy’s fastest growth since 2014, as Germany’s year-over-year GDP growth was pushed up to 2.1%.
The bigger release is tomorrow, as GDP growth for the Euro-Zone is released, and on Thursday, we get minutes from the most recent ECB meeting. This was the ECB meeting where markets pretty much directly faded Mario Draghi as he was speaking: After previous ECB meetings saw Mr. Draghi take a dovish tone, remarking that stimulus exit hadn’t even yet been discussed at the bank, the Euro would soften as investors calmed rate hike bets. But in the weeks following, an extremely weak U.S. Dollar would take over as EUR/USD would eventually resume that bullish trend.
But at July’s rate decision, markets weren’t having any of that, as the Euro rose throughout the press conference, even as Mr. Draghi continued to say that the ECB hadn’t yet discussed the prospect of stimulus exit. On Thursday, we get the minutes from that meeting, and market participants will surely be evaluating that release to see just how interested the rest European Central Bank might be with tighter policy options.
As we near that release, EUR/USD is working on a longer-term zone of support. At 1.1685 we have the 23.6% retracement of the 2008-2017 major move, and at 1.1736 we have the 38.2% retracement of the 2014-2017 move. Both levels are shown below:
EUR/USD Weekly: Current Support Showing at Confluent Long-Term Zone
Chart prepared by James Stanley
