EUR/USD has recorded gains on Thursday. In the North American session, EUR/USD is trading at 1.1813, up 0.30% on the day. The pair has recovered the losses seen on Wednesday.
Eurozone GDP expected to rebound
Major economies have rebounded nicely in the third quarter, after suffering sharp losses in Q2. This was seen in the GDP numbers for the US and the UK, and investors are counting on a sharp bounceback from Eurozone GDP as well. In the second quarter, GDP came in at -12.1%, but the economy is expected to reverse directions and post a gain of 12.7 per cent. If the GDP release is within expectations, the euro could post gains. On the employment front, Eurozone Employment Change is expected to improve, with a forecast of 0.7% in Q3, after a decline of 2.8% in the second quarter.
Brexit negotiations in final stage
The European Union and the UK are scheduled to resume negotiations next week, as the sides try to hammer out a post-Brexit trade agreement. With the deadline of December 31st looming ever closer, there is still hope that a deal can be reached. However, Ireland’s foreign minister, Simon Coveney, sounded pessimistic, saying that reaching an agreement would be “very difficult”. British Prime Minister Johnson hasn’t shied away from playing hardball with the Europeans and has said in the past that it would be a “good thing” if the UK were to leave the EU without a deal. If that happens, the two sides will be bound by World Trade Organisation trade rules, which could mean tariffs on a range of imports and exports and higher prices for consumers. An unofficial deadline for reaching a deal has been set, that being the European Summit on November 19th. If no deal is announced by then, it could mean that the UK will leave without a deal, which could weigh on EUR/USD.
- 1.1826 is under pressure in resistance. The next resistance line is at 1.1873
- There is support for the pair at 1.1739, followed by a support line at 1.1699
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