empty
29.04.2019 11:11 AM
EURUSD: Despite the growth of the US economy, there are still problems with consumer and business spending

On Friday, the US dollar made another attempt to grow after the release of the report, which indicated that the US economy in the first quarter of 2019 grew at a high rate due to an increase in exports and investment in inventories. This allowed to resolve the problem associated with the slowdown in demand from consumers and companies.

However, the bears did not manage to stay at the new minimums, which led to a quick profit taking and a small upward correction of the euro by the end of the North American session.

According to the data of the US Department of Commerce and the first preliminary estimate, the US GDP in the 1st quarter of the current year grew immediately by 3.2% per annum, while economists had expected growth of only 2.5%, after 2.2% in the 4th quarter of year 2018.

This image is no longer relevant

As noted above, the main contribution was made due to large export growth, while imports gradually declined. Also, the growth of public spending and private investment added a few tenths to GDP. The main problem is a slower growth in consumer spending, as well as business, where a slowdown was noted in the first quarter. Thus, consumer spending in the 1st quarter increased by only 1.2% after rising 2.5% in the 4th quarter of 2018. The reduction in the main item of expenditure has affected large purchases and durable goods.

Also on Friday, it became known that consumers' assessment of the prospects for the American economy in April of this year has somewhat deteriorated. According to the University of Michigan, the final consumer sentiment index in April 2019 was 97.2 points, down from the March value of 98.4 points. The university noted that the average value of the index over the past 28 months is 97.2 points.

This image is no longer relevant

After the published data, a presentation was made by Economic Advisor to the USS President Larry Kudlow, who said that strong GDP data was provided by the current policy of Donald Trump, which in the future will further contribute to economic recovery.

Kudlow also drew attention to the slowdown in inflation, noting that its low level may show a decrease in the Fed's rates in the coming months. With regard to trade negotiations between the US and China, the presidential adviser remains cautiously optimistic.

The technical picture in the EURUSD pair has not changed significantly. Trading in the next few days will be conducted from the support range of 1.1115, where the bulls will try to build a new lower limit of the ascending channel. The main problem for buyers of risky assets will be the upper limit of the current side channel at 1.1180, a breakthrough of which will lead the trading tool to return to levels 1.1210 and 1.1240.

Jakub Novak,
Analytical expert of InstaForex
© 2007-2025
Select timeframe
5
min
15
min
30
min
1
hour
4
hours
1
day
1
week
Earn on cryptocurrency rate changes with InstaForex
Download MetaTrader 4 and open your first trade
  • Grand Choice
    Contest by
    InstaForex
    InstaForex always strives to help you
    fulfill your biggest dreams.
    JOIN CONTEST

Recommended Stories

The Yen Has Lost Its Bullish Momentum

The Consumer Price Index (CPI) in the Tokyo region declined in June from 3.4% to 3.1% year-over-year, marking the first signal so far that may indicate a slowdown in price

Kuvat Raharjo 12:21 2025-06-27 UTC+2

EUR/JPY. Analysis and Forecast

The EUR/JPY pair is regaining positive momentum during today's trading session, reversing its recent decline.The euro continues to benefit from the prevailing sentiment of selling the U.S. dollar

Irina Yanina 12:17 2025-06-27 UTC+2

Inflation in Canada Remains Too High – USD/CAD May Accelerate Its Decline

Inflation in Canada remains too high to expect a rate cut by the Bank of Canada at its upcoming meeting. In April, inflation sharply slowed to 1.7% y/y, and most

Kuvat Raharjo 11:16 2025-06-27 UTC+2

XAU/USD. Analysis and Forecast

Gold is drawing renewed selling interest today after breaking below the key $3300 level. Traders are awaiting the release of the U.S. Personal Consumption Expenditures (PCE) Price Index, which

Irina Yanina 10:47 2025-06-27 UTC+2

PCE Index Data Unlikely to Significantly Impact Market Dynamics (Potential for Renewed Growth in EUR/USD and Bitcoin)

The easing of tensions in the markets, following a pause in the military conflict in the Middle East, supports the return of the previous paradigm—an increase in demand for stocks

Pati Gani 09:52 2025-06-27 UTC+2

The Market Is Off the Leash

Greed has returned to the markets. While professionals warn about the need for caution amid geopolitical uncertainty, trade wars, and the state of the U.S. economy, retail investors are once

Marek Petkovich 09:16 2025-06-27 UTC+2

What to Pay Attention to on June 27? A Breakdown of Fundamental Events for Beginners

There are relatively few macroeconomic reports scheduled for Friday. Some experts refer to the PCE indicator as "important" and "the Fed's favorite," but we do not share that view

Paolo Greco 07:02 2025-06-27 UTC+2

GBP/USD Overview – June 27: History Doesn't Repeat Itself

The GBP/USD currency pair continued its strong upward movement throughout Thursday. Since the beginning of the week, the U.S. dollar has lost "only" 330 pips. As we've previously stated

Paolo Greco 03:41 2025-06-27 UTC+2

EUR/USD Overview – June 27: Can Trump Balance the Trade Deficit?

The EUR/USD currency pair is in a "free rise" (similar to the term "free fall"). The dollar is once again plunging into the abyss, just as we repeatedly warned. It's

Paolo Greco 03:41 2025-06-27 UTC+2

Powell, Trump, and Everyone Else

What will change with the arrival of a new Federal Reserve Chair? This is a rather important question, and the answer to it may already have implications for the U.S

Chin Zhao 00:08 2025-06-27 UTC+2
Can't speak right now?
Ask your question in the chat.
Widget callback
 

Dear visitor,

Your IP address shows that you are currently located in the USA. If you are a resident of the United States, you are prohibited from using the services of InstaFintech Group including online trading, online transfers, deposit/withdrawal of funds, etc.

If you think you are seeing this message by mistake and your location is not the US, kindly proceed to the website. Otherwise, you must leave the website in order to comply with government restrictions.

Why does your IP address show your location as the USA?

  • - you are using a VPN provided by a hosting company based in the United States;
  • - your IP does not have proper WHOIS records;
  • - an error occurred in the WHOIS geolocation database.

Please confirm whether you are a US resident or not by clicking the relevant button below. If you choose the wrong option, being a US resident, you will not be able to open an account with InstaForex anyway.

We are sorry for any inconvenience caused by this message.