DailyFX.com -

- U.S. Economy to Grow 3.0%- Fastest Pace of Growth Since 3Q 2013.

- Personal Consumption to Expand for 18-Consecutive Quarters.

Trading the News: U.S. Gross Domestic Product (GDP)

The advance Gross Domestic Product (GDP) report may heighten the appeal of the U.S. dollar as the world’s largest economy is expected to grow an annualized 3.0% in the second-quarter.

What’s Expected:


Click Here for the DailyFX Calendar

Why Is This Event Important:

A marked rebound in the growth rate may spark a greater dissent within the Federal Open Market Committee (FOMC) as a growing number of central bank officials scale back their dovish tone for monetary policy, and Chair Janet Yellen may come under increased pressure to normalize monetary policy sooner rather than later as the outlook for growth and inflation improves.

For LIVE SSI Updates Ahead of the U.S. GDP Print, Join DailyFX on Demand

Expectations: Bullish Argument/Scenario




Average Hourly Earnings (YoY) (JUN)



Change in Non-Farm Payrolls (JUN)



Personal Income (MAY)



The pickup in wage growth along with the ongoing improvement in the labor market may generate a better-than-expected GDP print, and a large uptick in the growth rate may generate a bullish reaction in the greenback (bearish EUR/USD) as it fuels interest rate expectations.

Risk: Bearish Argument/Scenario




New Home Sales (MoM) (JUN)



Consumer Price Index (YoY) (JUN)



Housing Starts (MoM) (JUN)



However, sticky inflation paired with the persistent slack in the housing market may weigh on the growth rate, and a disappointing GDP release may spur a near-term selloff in the reserve currency as it gives the Fed greater scope to retain its highly accommodative policy stance for an extended period of time.

How To Trade This Event Risk(Video)

Bullish USD Trade: U.S. Economy Expands 3.0% or Greater

  • Need to see red, five-minute candle following the release to consider a short trade on EURUSD
  • If market reaction favors a long dollar trade, sell EURUSD with two separate position
  • Set stop at the near-by swing high/reasonable distance from entry; look for at least 1:1 risk-to-reward
  • Move stop to entry on remaining position once initial target is hit; set reasonable limit

Bearish USD Trade: 2Q GDP Reading Disappoints

  • Need green, five-minute candle to favor a long EURUSD trade
  • Implement same setup as the bullish dollar trade, just in the opposite direction

Potential Price Targets For The Release


EUR/USD Daily Chart

Chart - Created Using FXCM Marketscope 2.0

  • Despite oversold RSI signal, downside targets remain favored
  • Interim Resistance: 1.3650 (78.6% expansion) to 1.3670 (61.8% retracement)
  • Interim Support: 1.3370 (38.2% retracement) to 1.3380 (38.2% expansion)

Read More:

Price & Time: What Is Going On With Gold?

US Dollar Turn Can Forge Trend on Fed Decision, NFPs, 2Q GDP

Impact that the U.S. GDP report has had on EUR/USD during the last release


Data Released



Pips Change

(1 Hour post event )

Pips Change

(End of Day post event)

1Q A


04/30/2014 12:30 GMT





1Q 2014 U.S. Gross Domestic Product (GDP)

EUR/USD to Face Further Losses on Strong U.S. 2Q GDP

The U.S. economy grew a lackluster 0.1% in the first-quarter after expanding an annualized 2.6% during the last three-months of 2013, and the persistent slack in private sector activity may continue to cast a bearish outlook for the greenback as the Fed retains a dovish outlook for monetary policy. The dollar struggled to hold its ground following the dismal GDP print, with the EUR/USD climbing above the 1.3850 region, and the reserve currency struggled to hold its ground throughout the North American session as the pair ended the day at 1.3864.

Related Articles
  1. Investing News

    China’s Forex Reserves Dropped Significantly

    China’s forex​ reserves dropped by a record $93.9 billion at the end of August to $3.56 trillion because the Central Bank has been selling dollars to provide a cushion to the falling yuan​
  2. Forex

    The Pros and Cons of a Fully Convertible Rupee

    Amid the rising economic power of India, the talks of making the Indian currency fully convertible are gaining momentum. We look at the pros and cons.
  3. Forex Fundamentals

    Chinese Yuan an Unlikely Reserve Currency

    As the world's second largest economy, China's challenge to America’s dominance includes a push to make the yuan (RMB), the world’s reserve currency. Whether it can do that now is unclear.
  4. Economics

    How Currency Enforcement Helped Sink The Trans-Pacific Partnership (TTP)

    One particular barrier to trade that has received much attention of late and caused delays in negotiations of the TPP is exchange-rate manipulation, by which a country artificially devalues its ...
  5. Forex

    Top U.S Forex News Sites

    Breaking news moves forex markets. Here are the top U.S. sites for tracking forex news.
  6. Investing

    Financial News Comparison: Bloomberg Vs. Reuters

    Access to financial information has grown with the expansion of digital news. Bloomberg and Thomson Reuters lead the pack, claiming a majority of the business information market.
  7. Economics

    Who Benefits From South Korea's Lowered Interest Rates?

    South Korea is the latest country to cut interest rates in an attempt to stimulate economic growth.
  8. Forex Education

    The Top Uses For P2P Currency Exchange

    Peer-to-peer (P2P) currency exchange networks offer a viable and cheaper alternative for buying and selling currencies.
  9. Forex

    Steps To Open An Offshore Forex Account

    Here is a simple breakdown of how to open an offshore forex account for US-based users, including legal requirements.
  10. Entrepreneurship

    Top Forex Trading Apps

    A brief overview of the top apps that help forex traders with on time information, charts and more.

You May Also Like

Trading Center