US GDP preview: What to expect of EUR/USD?

By FXStreet FXStreet (Mumbai) – The EUR/USD pair spiked to a high of 1.0670 in European session, before falling back to 1.0645 ahead of the release of the second estimate of the US Q3 GDP.

December rate hike bets at 73.6% ahead of GDP

The markets expect the GDP to be revised higher to 2.0% from the preliminary estimate of 1.5%. Many investment banks also see a possibility of the GDP printing above 2.0%. The data could turn out to be a non-event for the markets in case GDP prints around estimates. Moreover, the markets consider December liftoff as a done deal and currently the CME Fed watch data shows a 73.6% probability of the December liftoff.

Depending on the actual GDP figure, the markets are more likely to begin speculating on the size of the liftoff – 25bps or lower than 25bps. Accordingly, the USD could move across the board. The likelihood of another major spike in the USD could be seen if the GDP blows past expectations.

Meanwhile, the core CPE (seen unchanged at 1.3%) may get overshadowed by the headline figure unless the number is horribly weak or surprisingly strong.

EUR/USD Technical Levels

At 1.0645, the immediate resistance is seen at …read more

Source:: FX Street