Eurostat will publish the first estimate of Eurozone inflation and growth figures for July and Q2 2021 respectively at 0900 GMT on Friday. The headline CPI is anticipated to rise to 2.0% YoY while the core inflation is seen dropping to 0.8% YoY in the reported month. On an annualized basis, the bloc’s economy is likely to rebound sharply by 13.2% in Q2 while inter-quarter the GDP rate is expected to expand by 1.5% vs. -0.3% prior. Ahead of this data set, Germany is set to publish its Q2 Preliminary GDP report at 0800 GMT, with the economy seen growing by 2% QoQ vs. -1.8% booked in the previous quarter.
Impact on EUR/USD as observed the reaction is likely to remain confined between 10 and 20 pips in deviations up to 3 to -4, although in some cases, if notable enough, a deviation can fuel movements of up to 30-45 pips. From a technical perspective, the recent rebound from support marked by a short-term ascending trend-line stalled just ahead of monthly swing highs, around the 1.1900 neighborhood. The mentioned handle should now act as a key pivotal point for traders, which if cleared decisively should pave the way for additional gains. The subsequent short-covering move has the potential to lift the pair back towards the 1.2000 psychological mark. On the flip side, the 1.1850-45 region now seems to protect the immediate downside ahead of the 1.1800 mark and the 1.1770-60 region.