EUR/USD: Upbeat Eurozone GDP would add credence to the hawkish ECB rhetoric

• Hawkish ECB rhetoric has put a bid under the EUR.
• A better-than-expected Eurozone GDP would boost hawkish ECB expectations.

The EUR/USD pair rose to 1.18 in Asia - the highest level since May 22 and will likely rally further if the Eurozone first quarter GDP, due at 09:00 GMT, beats estimates.

ECB amplifies hawkish rhetoric

The Europen Central Bank (ECB) officials have been out on the wires stating the central bank will likely discuss the timetable for ending its unprecedented stimulus program when policymakers gather in Riga, Latvia next week.

The hawkish sound bites coupled with fading Italian political uncertainty has put a strong bid under the common currency.

A better-than-expected Eurozone first quarter GDP would add credence to the ECB's hawkish rhetoric and hence could push the EUR higher across the board. The market expects the official data to show the Eurozone economy expanded 2.5 percent year-on-year and 0.4 percent quarter-on-quarter in the first quarter.

That said, the upside move in the EUR/USD may run out of steam if the US 10-year treasury yield finds acceptance above the 3 percent mark. As of writing, the 10-year yield is trading at 2.98 percent and the EUR/USD is changing hands at 1.1790.

EUR/USD Technical Levels

Resistance: 1.1855 (38.2% Fib R of April-May sell-off), 1.1916 (January 9 low), 1.1961 (November 27 high).

Support: 1.1772 (session low), 1.1727 (5-day moving average), 1.1680 (10-day moving average).