Key Points
- The Euro is consolidating against the US Dollar after it surged this past week post awful NFP figures.
- There is a flag pattern formed on the hourly chart of the EURUSD pair, which may provide us the next break in the near term.
- The Euro Zone Gross Domestic Product released by the Eurostat posted a rise of 0.6% in Q1 2016, compared with the previous quarter.
- In terms of the monthly change, there was a rise of 1.7%, more than the forecast of 1.5%.
Technical Analysis
The Euro surged this past week vs the US Dollar, and traded above the 1.1300 resistance area. The main reason for the upside was a poor US NFP figure. Currently, the EURUSD pair is consolidating, and forming a flag pattern formed on the hourly chart.
The flag support area is also around the 50 hourly simple moving average. So, if the EURUSD pair climbs higher, then a break above the flag resistance area is needed for more gains.
On the upside, the next resistance can be around the 1.1450 level.
Euro Zone Gross Domestic Product
In the Euro Zone today, the Gross Domestic Product was released by the Eurostat. The market was expecting the measure of the total value of all goods and services produced by the Eurozone to increase by 0.5% in Q1 2016, compared with the previous quarter. However, the result was positive, as there was an increase of 0.6%.
Moreover, the report added that “Compared with the same quarter of the previous year, seasonally adjusted GDP rose by 1.7% in the euro area and by 1.8% in the EU28 in the first quarter of 2016, after +1.7% and +2.0% respectively in the previous quarter“.
In short, the market sentiment is in favor of the Euro bulls, but EURUSD needs to break the flag resistance for more gains in the short term.
