The economic conditions in Germany are often considered when estimating the overall economic situation in the eurozone. The fact is that Germany is the largest economy in the region. In other words, if Germany falls into recession, the eurozone will also face such a problem.
However, the eurozone final GDP data did not surprise traders. It just confirmed a slowdown in the economic growth to 1.0% from 1.8%. Before the publication of the report, it became known that Germany had slid into a recession. That is why there were concerns that the final data on the eurozone GDP will be worse than expected. However, on an annual basis, the eurozone economy expanded, thus slightly boosting the euro.
Nevertheless, on a quarterly basis, the economy contracted, thus confirming a technical recession in the eurozone. According to the final data, in the first quarter of 2023, GDP dropped by 0.1% after the same decline in the fourth quarter of the previous year.
Today, traders are focused on the expectations of the ECB key rate hike at the meeting that is scheduled for the next week. A further rise in the euro and the pound sterling could be seen amid the US unemployment claims data.
Economists anticipate an insignificant increase in the number of claims. Thus, the number of initial unemployment claims may rise by 3 thousand. Meanwhile, the number of continuing claims may inch up by 1 thousand.
Since the US dollar is extremely overbought, even slightly negative figures may cause its depreciation.
On the trading chart, we see that the euro/dollar pair showed a local surge in activity. However, this did not result in considerable changes. The quote is still hovering within a sideways channel.
Under the current conditions, the correctional cycle from the high of the mid-term uptrend may point to a change in the market sentiment. Traders will get an initial technical signal of a rise once the price consolidates above 1.0750 at least on the four-hour chart. At the same time, a settlement below 1.0660 may lead to the continuation of the existing correctional movement.
Meanwhile, the pound sterling reached the level of 1.2500 against the US dollar. There, the volume of long positions dropped, thus pushing the price to the levels recorded early today.
Although the price consolidated above 1.2450, there are no noticeable changes on the chart. However, the sideways movement could be replaced by an upward one. Thus, if the price once again touches 1.2500, it may climb to the local high recorded in June. In case of a downward scenario, the pair may settle below 1.2390 and make an attempt to break the support level of 1.2350.


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00:00 INTRO
00:20 Eurozone Annual GDP Growth Rate
00:51 Eurozone Quarterly GDP Growth Rate
01:11 ECB key interest rate
01:28 Quotes
01:51 EUR/USD
02:34 GBP/USD