The Eurozone's economic growth data has left the EUR/USD pair in a depressed state, with the Euro (EUR) drifting lower on Friday. The pair is trading at 1.1915 at the time of writing, with support at the 1.1900 area in focus. Despite better-than-expected Gross Domestic Product (GDP) figures in Germany and the Eurozone, the pair remains under pressure from a stronger US Dollar (USD).
The market's anticipation of US President Donald Trump's announcement of the next Fed Chair has been a significant factor. The media's speculation that former Fed Governor Kevin Warsh will take over has been welcomed by the market, as it sees Warsh as a guarantee of the central bank's independence. This news has contributed to the US Dollar's recent gains.
Additionally, the agreement between US Senate Democrats and Republicans on a package of spending bills has boosted hopes that another government shutdown can be avoided, further supporting the Greenback. However, the mixed US economic data released on Thursday, including higher-than-expected Initial Jobless Claims and a widening trade deficit, has cast a shadow over the Dollar's recent gains.
The preliminary Eurozone Q4 GDP and German Harmonised Index of Consumer Prices (HICP) figures, due for release on Friday, will be closely watched during the European session. Later, the US Producer Price Index (PPI) data for December will be the focus. The market's reaction to these figures will be crucial in determining the EUR/USD pair's next move.
The Euro's performance against major currencies today is also worth noting. The Euro was the strongest against the Australian Dollar. However, the technical analysis suggests that the EUR/USD pair is under pressure, with support at 1.1895 and resistances at 1.2000 and 1.2082. The MACD histogram has slipped below zero, and the RSI is attempting to break the key 50 level, indicating increasing bearish momentum.
The Gross Domestic Product (GDP) figures, released by Eurostat on a quarterly basis, are a critical indicator of the Eurozone's economic health. The QoQ reading compares economic activity in the reference quarter to the previous quarter, while the YoY reading compares economic activity in the reference quarter to the same quarter a year earlier. Generally, a rise in these indicators is bullish for the Euro (EUR), while a low reading is seen as bearish.
