EUR/USD still fluctuating
In the course of the European session on Wednesday, the EUR/USD currency pair followed its range-lateral path on continuously closing below 1.1400. Overall, stability is the name of the game as we wait on potentially market-moving U.S. economic data scheduled to come out this week. Important release on jobs, GDP and PCE inflation just ahead. Market analysts point out that smarter money has the pair capped for now as traders await these key reports with enough influence to sway the course.
At the same time, the GBP/USD currency pair moved warily below the 1.3400 mark, mirroring that mood of caution in the market. During European trading hours, the pound caused us major pressure. Market participants were especially focused on new economic data coming out of the U.S.
The future economic realities of Europe have been clouded by an unprecedented crisis of leadership as Germany faulters. This comes as shootings indicate that Germany’s Gross Domestic Product (GDP) contracted at an annualized rate of 0.2%. This drop happened in the first three months of the year. Very much in line with market expectations, this steep decline indicates that analysts were already looking for a worsening in economic activity.
Germany’s GDP contraction coincidence has taken the pressure off the currency speculators. Consequently, the EUR/USD pair remained calm under the 1.1400 level post-data. Traders seem to be looking at the broader long-term economic picture related to the state of Germany’s economy, ahead of important U.S. economic data expected this week.
As the European session develops, all eyes turn to the markets. They are acutely tuned into changes made to U.S. economic reports. How these indicators interact with currency movements will have a large impact on what happens going forward. This is particularly the case for EUR/USD and GBP/USD currency pairs.
Analysts are underscoring the significance of this Friday’s U.S. jobs data. They argue it, as well as the upcoming GDP and PCE inflation data, risk causing major turmoil in the currency markets. Given the potential for large and rapid changes in investor sentiment, these reports will be fundamental to positioning any short term trading strategy.