**EUR/USD Price Forecast: Euro Struggles at 1.1700 as U.S. GDP Growth Surges Past 3.8%**
*By TradingNews Staff, originally published on TradingNews.com*
The EUR/USD pair continues to face significant headwinds as the Euro struggles to maintain ground against the U.S. Dollar. The latest economic data from the United States revealed a sharper-than-expected rise in GDP growth, adding further weight to the greenback and limiting any upside momentum for the Euro. As traders eye the psychological resistance near the 1.1700 level, market sentiment appears to lean more favorably toward the U.S. Dollar amid robust U.S. economic fundamentals contrasted with lukewarm performance from the Eurozone.
This article examines the reasons behind the Euro’s recent weakness, the impact of U.S. economic data on currency markets, technical indicators for the EUR/USD pair, and what traders might expect in the coming sessions.
## Strong U.S. GDP Figures Support the Dollar
The U.S. economy surpassed market forecasts in the latest quarter, with GDP registering a sharp increase, providing renewed strength to the U.S. Dollar. The positive data included:
– **Real GDP growth for the quarter was measured at 3.8%**, considerably higher than the estimated 3.3%.
– Consumer spending, a key driver of the American economy, remained strong, indicating continued domestic resilience.
– Business investment showed signs of recovery, reinforcing the outlook for sustained economic expansion.
These indicators suggest that the U.S. Federal Reserve may adopt a more proactive monetary stance if inflationary pressures resurface or growth maintains its current trajectory. The firm macroeconomic outlook lends strength to the Dollar and diminishes appetite for currencies with weaker economic backdrops, such as the Euro.
## Eurozone’s Economic Struggles Weigh on the EUR
While the U.S. reports positive data, the Eurozone continues to underperform. Key indicators have pointed to sluggish growth and lower inflation, restraining the European Central Bank’s (ECB) ability to tighten policy in line with the Fed. The Eurozone’s challenges include:
– **Flatlining growth in Germany and France**, the continent’s two largest economies.
– Ongoing tightness in the labor markets, but without corresponding wage growth or consumer confidence increases.
– Continued effects of higher energy costs and political uncertainty, especially regarding inflation expectations across select EU members.
Without substantial economic improvement or a shift in the ECB’s narrative, any upward movement in the Euro is likely to be hard-won and sensitive to shifts in broader global risk sentiment.
## Technical Analysis: Resistance at 1.1700 Holds Firm
The EUR/USD pair failed to breach the significant 1.1700 resistance level during the last trading sessions, consolidating losses instead below that psychological ceiling.
Key technical signals include:
– **50-day Moving Average**: The pair remains constrained below its 50-day simple moving average, indicating a bearish trend.
– **RSI (Relative Strength Index)**: The current RSI hovers near 45, neither in oversold nor overbought territory, suggesting the market remains cautious.
– **MACD (Moving Average Convergence Divergence)**: The momentum indicator shows a bearish crossover, supporting the probability of further declines.
– **Support Levels**:
– Immediate support lies near 1.1620, where buyers have previously emerged.
– A break below this level may expose EUR/USD to the 1.1570 region.
– **Resistance Levels**:
– The 1.1700 handle continues to act as firm resistance.
– Above that, the 1.1750 to 1.1785 range remains another key hurdle for bulls.
Unless a definitive break above key resistance is achieved, bears are likely to maintain control in the short term.
## Market Reactions and Investor Sentiment
Traders and institutional participants have responded to the stronger U.S. GDP print by increasing long positions
Read more on EUR/USD trading.