The euro remained range-bound against the greenback yesterday following the release of slightly better-than-anticipated German GfK consumer climate data and mixed economic data from the US. While US first-time unemployment claims were lower than expectations, the country’s first-quarter GDP growth was considerably below forecasts. Overall, the EUR/USD pair traded in a range of 1.0685 to 1.0740 in the past 24 hours.
The German GfK consumer climate index improved to a two-year high of -24.20 in the forecast for May from -27.30 in the previous month, slightly better than expectations of -25.90. The reading reflects the third-monthly increase.1.6
The willingness to save rose by 2.50 points to 14.90 points. A year ago, the savings gauge stood at 1.80 points. GfK and the Nuremberg Institute for Market Decisions (NIM) have pointed out that the high willingness to save reading prevents a steep rise in consumer confidence.
For the third consecutive time, in April, consumers’ income expectations witnessed an increase. This rise is notably substantial, with a surge of 12.2 points observed. The indicator now stands at 10.7 points, reaching a level not seen since January 2022, when it peaked at 16.9 points.
The willingness to buy increased 2.7 points in April to 12.60 points. The economic expectations index rose 3.80 points to 0.70 points, reflecting the highest level since July 2023.
According to the advance estimate published by the Bureau of Economic Analysis, the US economy expanded 1.60% q-o-q in the March 2024 quarter following 3.40% GDP growth in the previous quarter, missing forecasts of a 2.50% GDP increase.
Current-dollar GDP rose at an annual rate of 4.80% (or $327.50 billion) in 1Q 2024 to $28.28 trillion. In 4Q 2023, the US GDP grew by 5.10% (or $346.90 billion).
The personal consumption expenditures (PCE) price index rose by 3.40% in 1Q 2024, compared with a rise of 1.80% in 1Q 2023. Excluding food and energy prices, the PCE price index grew 3.70%, compared with a growth of 2%.
Current-dollar personal income grew $407.10 billion in the March 2024 quarter, compared with a rise of $230.20 billion in the December 2023 quarter.
Disposable personal income grew by $226.20 billion (or 4.50%) in 1Q 2024, up from $190.4 billion (or 3.80%) in 4Q 2023. Personal savings stood at $755.70 billion in the March 2024 quarter, down from $815.50 billion in the December 2023 quarter.
According to the US Department of Labor, the country’s first-time unemployment claims declined to 207,000 in the week ending April 20 from 212,000 in the previous week, bettering forecasts of 214,000 claims. The four-week moving average was 213,250, down from 214,500 in the previous week.
The lower-than-anticipated US GDP data is expected to strengthen the EUR/USD pair in the upcoming trading sessions.
Technically, the EUR/USD pair is ascending after testing the support at 1.0625. The next resistance is anticipated to be only near 1.0875. Additionally, the currency pair is trading above its 50-day moving average, while the MACD indicator is showing a positive reading. Therefore, we anticipate the EUR/USD pair to remain in an uptrend in the near term.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
