In European trading on Thursday, the EUR/USD pair is trending downwards, nearing the 1.0400 mark. This movement comes as market participants closely watch the upcoming GDP data from Germany and the European Union, ahead of the European Central Bank (ECB) decision. Meanwhile, the Federal Reserve's hawkish pause poses a challenge for non-yielding commodities, further influencing the pair's trajectory.
Traders are cautiously holding back from making substantial investments in anticipation of the US Q4 advance GDP data release. The unexpected contraction in France's Q4 GDP has added pressure on the EUR/USD, which is also impacted by growing expectations of an ECB rate cut. A renewed surge in the US Dollar further weighs on the pair.
The US bond yields have been sliding, keeping USD bulls on the defensive, thereby providing some support to the currency pair. However, technical analysis reveals a symmetrical triangle formation, indicating a potential target at the $0.84 level, which is 110% of the current trading levels. Market analysts largely anticipate another 25-basis point interest rate cut from the ECB this week.
Elsewhere in currency markets, GBP/USD is experiencing downward pressure, holding below 1.2450 during Thursday's early European session. Renewed buying interest in the US Dollar, coupled with a cautious market environment, has dragged this pair lower.
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