The EURUSD is wavering in the morning session as traders wait for the second estimate of EU Q3 GDP data that will come out at 10:00 GMT.
Last month, data from Eurostat showed that the EU’s economy expanded by a record 12.7% in the third quarter. That increase was substantially higher after the economy contracted by a record 11.8% in the second quarter, pushing the region to a technical recession.
Today, the statistics agency will release another estimate that will include data from most countries. It will also feature updates from countries that were included in the first reading.
Still, analysts are convinced that the EU economy continued to expand in the third quarter. But, the economy also declined on an year-on-year basis.
Also, the challenge for the EU is that the region is now facing another wave of the virus that has affected most countries. Indeed, countries like Germany and France have announced partial lockdowns to prevent the disease from spreading. This could have major impacts on the EU’s economy, according to economists and ECB officials.
The weak inflation in the United States will also move the EURUSD price today. Yesterday, data from the country showed that the overall consumer prices rose by 1.2% while the core CPI rose by 1.6%. These numbers are below the target of 2.0% set by the Fed. At 13:30 GMT, the US will release the producer price index (PPI) data. Like the CPI yesterday, analysts believe that these numbers too will show that inflation remains low.
Therefore, while the EU Q3 GDP and US PPI numbers are important, we don’t expect them to have significant impacts on the EURUSD price. That is because these numbers have already been priced-in by the market. Instead, the pair will react to any new developments on Covid, vaccine, and US elections.
The EURUSD is trading at 1.1800, which is an important psychological level. On the four-hour chart, the price is between the support of 1.1600 and resistance of 1.1920. It is also at the same place as the 25-day and 15-day moving averages. Most importantly, it is a few pips above the standard pivot point.
Therefore, for today, I suspect that the price will remain in the current range. The upper limit will be at 1.1850 while the support will be at 1.1750.
