Forex: EUR/USD back to 1.3400 ahead of ECB and Italy GDP

The EUR/USD is fragile today, down by -0.39% on the day after the nose dive from 1.3440 to 1.3382 low on flash GDP data in Germany and France. The Eurozone figure is still due to be released, at 10:00 GMT. However, ahead of the ECB monthly report (at 09:00 GMT) and Italian GDP, the pair has returned to the 1.3400 handle.

About the EMU flash GDP Q4 due at 10:00 GMT: "As the advance GDP reading is expected to show the growth rate contracting another 0.4% in the fourth quarter, the weakening outlook for the region may produce a sharp selloff in the exchange rate, and the EURUSD may threaten the bullish trend carried over from the previous year should the print heighten speculation for additional monetary support", wrote David Song, currency analyst at DailyFX, expecting the ECB to continue to embark on its easing cycle this year with a fresh record-low benchmark interest rate "in an effort to stem the downside risks for growth and inflation".

"The intraday Elliott wave count suggested that the rebound should terminate circa 1.3518 - the 50% retracement of the recent sell off and that has now been seen, our target remains 1.3270/55", wrote Commerzbank analyst Karen Jones.