Jump to content

EUR/USD lower despite GDP growth in France and Germany

Recommended Posts

The third quarter growth data in Germany has surprised traders with expansion. Economists had forecast a contraction of 0.2%, but there was an expansion of 0.3%. France came in as expected.

 Jeremy Naylor | Writer, London | Publication date: Friday 28 October 2022

German economy expands

Despite talks of looming recession in the German economy, none of it, as we saw the first reading of third quarter (Q3) gross domestic product (GDP) coming through with an expansion, not the contraction that we have been looking for.

Let's take a look at the numbers as they hit the wires this morning. Third quarter figures came in at 0.3%, a positive number. We'd been looking for a contraction of 0.2%.

Now that would have been the first month of what was expected to have been two continuous quarters of this reading. Year-on-year (YoY) we came through far stronger than expected at 1.2%.

French GDP expands

Also we saw expansion in the French economy as well. Earlier on today the French readings came in pretty much in line with expectations with the expansion of 0.2% quarter-on-quarter and 1% growth year-on-year.

Now under normal circumstances when looking at the reaction to this, you would expect to see the currency within those economies rise. What happens is none of that.


If you look at where we are in the EUR/USD.

As of the close of yesterday we disappeared below this blue dotted line, which is the 1-1 parity level. And that's exactly where we are at the moment. We have recently just tried to get back up above it - there was a little bit of positivity as a result of these GDP numbers, but you can see this direction of travel is down once again.

Now part of this is strength once again in the US dollar. But the moves that we saw yesterday were all about the fact that the European Central Bank (ECB) said it was going to continue to print money and that is expansionary, and that is something where we saw this euro pullback.

So the gains that we've seen up until the close of trade on Wednesday have to a degree evaporated since then and it's really all about the outlook and the worsening economy.

Once again, I think that's really driving this move in the foreign exchange markets with lower euro for a second day in a row.

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • In a bid to ensure the widespread use of cryptocurrency, certain platforms have come up with good initiatives to boost enthusiasm in cryptocurrency.  Bitget in an effort to achieve this have come up with an initiative known as the COO apprenticeship, this is in link with the platform’s #Blockchain4Youth initiaitve. Basically, the program requires eligible participants to collaborate closely with the team while gaining valuable leadership experience in the process. Similarly, they are also required to conduct market research as well as assist in the implementation of market strategies.  The prerequisites for participating are relatively easy; excellent communication skills, passion for crypto, blockchain tech as well as availability for a 3 month commitment with the possibility of travelling to Dubai.  The benefits tagged along this are overwhelming, you get gifts from Bitget in the form of monthly $BGB airdrops and Bitget Merchandise. Apart from being rewarded monetarily, the work experience, a widened horizon etc are part of the perks that come with this program.  However, the targeted regions for the program are; France, Germany, italy, Spain, Portugal and the UK. This is indeed a worthwhile opportunity for those that can participate.
    • GX Uranium ETF (URA) Elliott Wave Analysis  Function - Counter trend Mode - Corrective Structure - Emerging Zigzag Position - Red wave (C) of blue 4  Direction - Red wave (C) of blue 4 is still in play Details - Price broke blow 30. Wave (C) was confirmed by the break below 29.26. Should extend toward 25.94. The GX Uranium ETF is an exchange-traded fund (ETF) that focuses on investing in companies involved in the uranium industry. Uranium is a key component in nuclear power generation, and its demand is influenced by factors such as global energy needs, environmental concerns, and government policies regarding nuclear power.   Recent market movements have seen the GX Uranium ETF undergo a bearish correction, with a decline exceeding 5% over the current trading week. This downturn commenced on February 1st, 2023, and is anticipated to persist in the short term before encountering a support level, heralding the onset of renewed upward momentum. Notably, this correction unfolds within the broader context of a bullish trend that commenced in March 2022. Despite enduring an over 8-month pullback between November 2021 and July 2022, the ETF has steadily ascended, reaching its loftiest valuation since April 2014. Consequently, post the prevailing retracement, a resumption of the bullish trajectory is anticipated.   Analyzing the daily time frame reveals a discernible bullish impulse of the cycle degree (marked in blue) after the supercycle wave (b). The termination of the 3rd wave - designated as blue wave 3 - occurred in February 2023, characterized by a diagonal pattern, followed by the onset of the corresponding 4th wave. This 4th wave manifests as a zigzag pattern, navigating through wave (C) after completing wave (B) via an expanding diagonal. To maintain the integrity of the overall impulse structure, the 4th wave - delineated as blue wave 4 - must remain above the critical level of 24.36. Expectations converge on buyers eagerly awaiting the conclusion of wave (C) to propel the bullish momentum into the 5th wave. Examining the H4 chart illuminates the sub-waves of (A)-(B)-(C) and the emergence of wave (C). The initial target for wave (C) aligns with the 100% extension of wave (A) at 25.94, slightly above the psychological barrier of 25. Traders are thus advised to anticipate the culmination of wave (C) within the 25.94-25 zone, paving the way for subsequent rallies.   Technical Analyst : Sanmi Adeagbo Source : Tradinglounge.com get trial here!        
    • Greetings All I am curious as to how an instrument's price varies (oscillates) over time when (according to the platform) there has not been any volume traded on the instrument?   Insight will be greatly appreciated.  
  • Create New...