Forex forecast: How will U.S. GDP data impact EUR/USD?

NEW YORK (Forex News Now) – The Bureau of Economic Analysis is due on Friday to release a key report on U.S. gross domestic product in the second quarter, in one of the day’s major realtime forex news events.

The data is expected to show that the U.S. economy grew an annualized 1.5 percent in the second quarter, according to two major online FX trading news outlets, after growing 2.4 percent in the previous quarter.

The bureau is scheduled to publish the report at 12:30 P.M. GMT; as such, this key gauge of economic activity is likely to dominate European afternoon currency trading.

According to EUR USD analysis, if the report shows smaller-than-expected growth, stagnation, or even that the economy shrank, the data could lift EUR/USD toward resistance around the high of Aug. 19, 1.2902.

But should the report show that the U.S. economy grew faster than expected, the currency pair could be pushed down toward support around the low of Aug. 24, 1.2588.

Of course, an upbeat report could boost FX traders’ risk appetite, which would likely strengthen the euro against the dollar.