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The EUR/USD price is little changed as traders reflect on the latest US and EU GDP numbers. It is trading at 1.2120, which is slightly below this week’s high of 1.2150. It has gained by more than 3.50% in April, making it the first monthly gains this year.
EU GDP data
The European economy has had a tough start of the year as more countries in the region continued to see higher coronavirus cases. The countries also struggled in their vaccination drive and the impacts of Brexit.
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According to Eurostat, the overall Eurozone economy contracted by 1.8% after falling by 4.9% in the previous quarter. This decline was better than the expected decline of 2.0%.
In Germany, the economy contracted by 1.7% in the first quarter after rising by 0.5% in the fourth quarter. This contraction led to a year-on-year slowdown of 3.3%, which was worse than the previous 2.7%.
In Italy, the economy contracted by 0.4% on a quarter-on-quarter basis and by 1.6% on a year-on-year basis. In general, analysts expect that the Eurozone economy will rebound in the second quarter as more countries reopen. Members of the bloc have also started ramping up their vaccination drive.
These numbers came a day after the US published the latest GDP numbers. The data revealed that the economy grew by more than 6% in the first quarter as consumer spending rose because of the stimulus. The government and companies expanded their spending during the quarter.
Later today, the EUR/USD will react to the latest US personal spending and income numbers. Economists polled by Reuters expect that personal incomes rose by 20.3% in March after falling by 7.1% in the previous month. This growth will be because of the large $1.9 trillion stimulus package that was passed in March.
Personal spending, on the other hand, is expected to have risen by 4.1% in March after falling by 1.0% in the previous month.
EUR/USD forecast
The EUR/USD has been in an overall upward trend in April. It has moved from 1.1700 to 1.2150. On the four-hour chart, we see that this trend was supported by the 28-day weighted moving average (WMA). It has also moved above the 23.6% Fibonacci retracement level.
Further, the pair has formed an ascending channel pattern that is shown in orange. Therefore, the pair will continue rising so long as the price is above the 28-day EMA. However, a break below the lower line of the ascending channel will invalidate this trend.
