Selling the Bounce in EUR/USD After Stronger US Q1 Final GDP

EUR/USD has been consolidating within a range of 1.06 to 1.10 throughout 2024, with both buyers and sellers attempting to break out of these levels. The weekly chart highlights moving averages that define this range. Today, we decided to open a sell forex signal following a small jump earlier in the day.

Strong US Economic Data

The US dollar remains strong, bolstered by robust economic data such as last week's manufacturing and services PMI readings and this week's US Consumer Confidence report. Today’s data from the US was mixed but included some positive signals, keeping interest rate forecasts steady, with expectations of around two cuts by the end of the year. In contrast, the euro has faced pressure as the US dollar has strengthened.

EUR/USD Technical Analysis

EUR/USD H4 chart showing the 50 SMA stopping the climb again On the H4 chart, the 50 SMA has consistently acted as resistance, halting upward movements. Today, the Final GDP report from the US showed slightly stronger results than the previous reading, causing prices to tick higher. This prompted us to open a sell EUR/USD signal after the slight retrace higher during the European session.

US Q1 Final GDP Details

• US Q1 Final GDP: +1.4% vs. +1.3% expected
  • Second reading: +1.3%
  • Final Q4 reading: +3.2% annualized
  • Q3: +5.2% annualized
• Consumer spending: +1.5% vs. +2.0% second reading
• GDP final sales: +1.8% vs. +1.7% second reading
• GDP deflator: +3.1% vs. +3.1% second reading
• Core PCE: +3.7% vs. +3.6% second reading
• Corporate profits: -2.7% vs. -1.7% in second reading
• PCE services inflation excluding energy and housing: +5.1% vs. +4.9% second reading

The data indicates higher inflation, reflected in the increased Core PCE and PCE services inflation. However, lower consumer spending growth (from +2.0% to +1.5%) could signal downward pressure on prices. Although this data is slightly outdated as we near the second quarter, it still provides insight into economic trends that could impact current market conditions.

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