EUR/USD Forecast – Encountering Strong Resistance at 1.0936 – 1.0943 ahead of US GDP Report

The Euro is edging lower against the U.S. Dollar on Thursday as traders await U.S. GDP data at 13:30 GMT, which should mark the last quarter of solid growth before the lagging effects of the Federal Reserve’s rate hikes kick in, and could provide further clues about U.S. monetary policy.

At 13:17 GMT, the EUR/USD is trading 1.0894, down 0.0021 or -0.19%. On Wednesday, the Invesco CurrencyShares Euro Trust ETF (FXE) settled at $100.75, up $0.29 or +0.29%.

US GDP to Set the Tone

The U.S. economy likely maintained a strong pace of growth in the fourth quarter as consumers boosted spending on goods, but momentum appears to have slowed considerably towards the end of the year, with higher interest rates eroding demand.

According to a Reuters survey of economists, GDP growth likely increased at a 2.6% annualized rate last quarter after accelerating at a 3.2% pace in the third quarter. Estimates ranged from a 1.1% rate to a 3.7% pace. Growth for the full year is expected to come in at around 2.1%, down from the 5.9% logged in 2021.

Uncertainty ahead of Next Week’s ECB Meeting

Euro Zone yields rose on Thursday after recent comments from European Central Bank’s officials, but they were still far from their recent highs as investors price in a lack of strong hawkish signals from the ECB for its policy meeting next week.

Daily Swing Chart Technical Analysis

The main trend is up according to the daily swing chart. A trade through the April 21 main top at 1.0936 will reaffirm the uptrend. A move through 1.0766 will change the main trend to down.

The minor trend is also up. A trade through 1.0835 will change the minor trend to down. This will shift momentum to the downside.

The nearest resistance is the long-term 50% level at 1.0943. The closest support is a minor pivot at 1.0848.

Daily Swing Chart Technical Forecast

Trader reaction to 1.0951 is likely to determine the direction of the EUR/USD on Thursday.

Bullish Scenario

A sustained move over 1.0951 will indicate the presence of buyers. A trade through 1.0936 will reaffirm the uptrend, while a move through 1.0943 could trigger an acceleration to the upside.

Bearish Scenario

A sustained move under 1.0951 will signal the presence of sellers. The first downside target is 1.0848, followed by the minor bottom at 1.0835. Taking out this level could trigger an acceleration to the downside with 1.0766 the near-term target.