The Eurozone GDP release for the fourth quarter will not be able to delight investors with strong data, inasmuch as the COVID-19 pandemic has forced many European countries to impose lockdowns. At the same time, investors are initially too pessimistic about the prospects for economic growth in Europe, and the release of data may provide short-term support for the euro little bit better than the median forecasts.

The situation may be similar to the British one, when last week the GDP report came out slightly better than the consensus forecast, which provoked a rally in the pound. On the eve of Eurostat published data on the trade balance of the euro zone for December, where it documented an increase in “net exports” by 27.9%. Let me remind you that in November the growth rate was 30.3%. These high numbers signal that investors are unduly pessimistic about the growth prospects of the European economy.

Investment idea: Buy 1.2124/1.2110 and take profit 1.2168.