(DAILY NOTION) EUR/USD Inverted Cup and Handle Forms Ahead of EU GDP Data, Next Mover: EU GDP Data

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(DAILY NOTION) EUR/USD Inverted Cup and Handle Forms Ahead of EU GDP Data, Next Mover: EU GDP Data

Illustration photo of EUR/USD daily chart from Tradingview

The EUR/USD is wavering ahead of the important EU GDP data that will come out at 10:00 GMT. The EUR/USD is trading at 1.2075, which is slightly above this week’s low of 1.2053. 

The top catalyst for the EUR/USD will be the EU GDP data by Eurostat. Economists expect the data to show that the European economy rose by 12.7% in the fourth quarter. They also believe that it contracted by about 4.3% on an annualized basis Separately, other statistical agencies in countries like Portugal, Italy, and the Czech Republic will also deliver their GDP estimates.

These numbers will come a day after Markit published strong manufacturing PMI data from the European Union and the U.S. Also, the U.S. released strong construction spending numbers. And tomorrow, we will receive the ECB monetary policy statement and EU and U.S. services and composite PMI data.

On the four-hour chart, we see that the EUR/USD dropped to a low of 1.2052 yesterday. This was an important level since it was also the lowest level in January this year. The pair has also formed an inverted cup and handle pattern and is also below the 25-day and 15-day moving averages. It is also below the Ichimoku cloud. Therefore, because of the cup and handle pattern, I suspect that the EUR/USD will consolidate at this level before breaking-out lower.

FOLLOWME EUR/USD Overall Sentiment (As of 03:20 p.m., Feb 2, 2021).

Short - 61.23%

Long - 38.77%

For information please refer to Crispus Nyaga.

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