Euro against US dollar: On Wednesday, we should be wary of the preliminary estimate of the US first-quarter GDP, expected to come at an annualised rate of 2.0%
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Thanks to Alex Kuptsikevich from FxPro, we're able to publish his view on EUR/USD.
FXMAG.COM: What do you expect to be the next EUR/USD mover?
Alex Kuptsikevich (FxPro): It would not be surprising to see the quiet trading pattern of the first half of the week replaced by a significant recovery towards the end of the week. On Wednesday, we should be wary of the preliminary estimate of the US first-quarter GDP, expected to come at an annualised rate of 2.0%. As a rule, it often deviates from forecasts and provokes a market reaction. We believe Friday's German inflation and labour market estimates for April are more attractive. Inflation is expected to slow from 7.4% to 7.3%.
Inflation is expected to slow from 7.4% to 7.3%.
Alex Kuptsikevich (FxPro): But this is an early estimate, so there is considerable room for surprises. This report could set the tone for other releases from the major eurozone countries and determine their momentum. A sharp slowdown could put pressure on the EUR/USD as it would increase speculation that the ECB will reduce the pace of rate hikes.
On the other hand, strong data could trigger impulsive buying of the single currency and send it to new 13-month highs
Alex Kuptsikevich (FxPro): On the other hand, strong data could trigger impulsive buying of the single currency and send it to new 13-month highs. This would be an essential milestone in the trend that began at the end of September last year. The market will then shift to US interest rate expectations, with a decision expected mid-next week. The short-term decision is unlikely to be interesting, with the market pricing in a 90% chance of a 25-point hike. The main market driver will likely be clues about the Fed's next steps: Whether policy tightening will end there and when to expect a reversal.
