kingsoe

Possible Bearish for EurUSD

FX_IDC:EURUSD   Euro / U.S. Dollar
To summarize, the leading reports point to another robust reading for GDP growth. However, net trade was likely an even bigger drag on GDP growth in Q1, which supports the consensus for a weaker rate of expansion in Q1 2018.

The GDP price index, meanwhile, likely picked up the pace in Q1, which is contrary to expectations for a slightly weaker reading.

As for historical tendencies, there is a very strong tendency for Q1 GDP growth to be weaker compared to the previous year’s Q4 GDP growth, which is in-line with consensus.

However, there’s also a very strong historical tendency for economists to be too optimistic with their guesstimates since there are A LOT of downside surprises.

But on a more optimistic note, the GDP price index in Q1 is usually stronger compared to the reading for Q4 of the previous year.

However, the historical tendency of analysts being too optimistic also applies to the GDP price index. But on another optimistic note, that historical tendency failed to hold in the last two years.

But as always, keep in mind that we’re playing around with probabilities here.

Anyhow, do note that traders used to react based on how the actual reading for GDP growth compared to the consensus reading. However, the GDP price index has been garnering more attention lately since it is more directly linked to rate hike expectations.

Also, do note that the narrative since last week is the Greenback has been tracking the rise in U.S. bonds yields. And as mentioned earlier, bond yields took directional cues from the GDP report last time around, even though the Greenback had a more mixed performance. What I’m getting at here is that there’s a higher chance that tomorrow’s GDP report will have a bigger impact on the Greenback’s price action.

Okay, that’s all I’ve got. And remember, if news trading ain’t your thing or if high volatility makes you uncomfortable, then remember that you always have the option to sit on the sidelines and wait for things to settle down.
Comment: your comment and idea will be highly appreciated
Comment: EURUSD still under pressure and likely to drop down to 1:200

Just a psychology opinion

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