EUR/NZD Vulnerable ahead of GDP

Last week EUR/NZD surged higher and tested the significant resistance zone around 1.7130, with which bulls experience difficulties lately. Since then the pair suffered a huge drop and today was seen hovering around the key support at 1.6840.

Within the next hours the New Zealand Statistics will release the latest growth estimate with expectations of higher figures on GDP for the fourth quarter of 2017, but this optimism might play a low-down trick on the pair. 

On the four hour time frame the price is developing below its flat 100-day and 200-day SMAs, acting as first resistance at 1.6900. The 20-day SMA has eased its bearish slope and is currently located slightly above the current market price. 

RSI is hovering around 45 unable to find clear direction, while stochastic is showing string bearish momentum and is going to cross to below its mid-line.

During the upcoming session it’s very important to see how the pair will behave within the support zone at 1.6840 -1.6810. It’s a very significant area where last week’s lows met the bullish trend line, starting from February 2017. In case of breaking it to below, door are opened for testing 1.6720. On the upside the pair remains capped by the 100-day and 200-day SMAs and if bulls succeed to fight it and the to overcome next resistance at 1.7090, then we might be sure that the uptrend would hold for a while yet.

GDP up by 0.3% in the euro area and by 0.4% in the EU28

GDP in the euro area keeps its pace of growth of 0.3% in the four quarter of 2015 compared with the period from July to September, revealed the Eurostat estimate published today. The result did not surprise the analysts who did not expect a correction in the preliminary calculations.

The seasonally adjusted GDP has increased with 0.3% in the euro area (EA19) and by 0.4% in the EU28 during the last quarter of 2015. Comparing with the same quarter of the previous year, seasonally adjusted GDP has increased with 1.6% in the euro area and by 1.8% in the EU28 in the fourth quarter of 2015, after +1.6% and +1.9% respectively in the previous quarter. 

GDP growth by Member State for which data are available for the last quarter of 2015, Sweden (+1.3%), Estonia (+1.2%), Poland and Romania (both +1.1%), Hungary and Slovakia (both +1.0%) recorded the highest growth compared with the previous quarter. Decreases were registered in Croatia (-0.5%) and Latvia (-0.3%) while GDP in the Czech Republic remained stable.

The household consumption expenditure rose by 0.2% in the euro area and by 0.4% in the EU28 (after +0.5% and +0.6% respectively in the previous quarter).
Exports increased by 0.2% in the euro area and by 0.5% in the EU28 (after +0.2% in both zones). Imports rose by 0.9% in the euro area and by 1.1% in the EU28 (after +1.2% and +1.3%).

For the whole year 2015, GDP grew by 1.6% in the euro area and by 1.9% in the EU28, compared with 0.9% and 1.4% respectively in 2014.