Euro rises as Eurozone growth outpaces forecasts

• EUR/USD gains ground as Eurozone GDP expands 0.4% QoQ in the second quarter, twice the 0.2% market forecast.
• Germany, France, Italy and Spain report economic growth, while inflation remains elevated in Germany and Spain.
• US annualized GDP growth slows to 1.5%, while monthly Core PCE inflation rises less than expected.

EUR/USD trades higher near the 1.1460 area on Thursday as stronger-than-expected European economic data and softer United States (US) growth figures place pressure on the US Dollar (USD).

The Eurozone economy expanded 0.4% QoQ in the second quarter, beating expectations of 0.2% and recovering from the previous 0.2% contraction. On an annual basis, Gross Domestic Product increased 1.0%, well above the 0.5% market forecast and the previous 0.3% expansion. Growth was broadly distributed across the region. Germany’s economy expanded 0.2% QoQ, above the 0.1% forecast, while annual growth accelerated to 0.9% from 0.4%. France returned to growth with a 0.2% QoQ expansion, Italy grew 0.2% QoQ and Spain outperformed the region with a 0.7% QoQ increase, exceeding expectations of 0.6%.

In the US, preliminary second-quarter GDP increased at an annualized rate of only 1.5%, missing the 2.1% market forecast and slowing from the previous quarter. The weaker reading indicated that economic momentum moderated despite continued consumer spending and business investment.

The Core Personal Consumption Expenditures (PCE) Price Index rose only 0.1% MoM in June, below expectations of 0.2% and May’s 0.3% increase. The annual underlying inflation rate eased to 3.3% from 3.4%. Headline PCE declined 0.1% on the month from 0.5%, while the yearly rate slowed to 3.7% from 4.1%.

Short-term technical analysis:

On the 4-hour chart, EUR/USD trades at 1.1513, keeping a bullish near-term tone as it holds above both the 20-period Simple Moving Average (SMA) at 1.1407 and the 100-period SMA at 1.1416. The pair is extending its advance after reclaiming the mid-1.14s, with nearby horizontal supports at 1.1485 and 1.1476 reinforcing the constructive structure. The Relative Strength Index (RSI) around 71.8 shows overbought conditions, hinting that upside momentum is strong but increasingly stretched.

On the topside, immediate resistance is located at the horizontal barrier at 1.1536, where a clear break would open the way for further gains in the 1.15–1.16 region. On the downside, initial support is seen at 1.1485, followed by clustered levels at 1.1476 and 1.1469, with deeper demand emerging from the 100-period SMA at 1.1416 and the 20-period SMA at 1.1407 should a broader corrective pullback unfold.

(The technical analysis of this story was written with the help of an AI tool. Know more.)