Key Points
- Euro traded lower versus the US Dollar and recently broke a short-term support area.
- A bullish trend on the hourly chart of the EURUSD pair was broken, which might call for more losses.
- The German Economic Sentiment published by the ZEW posted a strong rise from 6.4 to 19.2 in June 2016.
- The ZEW Survey – Current Situation also posted a rise and came in at 54.5 in June 2016.
Technical Analysis
The Euro opened this week with a bullish tone and with a gap higher against the US Dollar. It traded as high as 1.1384 before it found sellers and moved down. During the downside move, the EURUSD pair broke a bullish trend on the hourly chart.
The recent break may ignite further losses and could push the pair towards the gap level.
On the downside, the next important support can be around the 100 and 200 hourly simple moving averages, which are currently at 1.1280.
German ZEW Economic Sentiment
Today in the Euro Zone, the German Economic Sentiment, which measures the institutional investor sentiment, reflecting the difference between the share of investors that are optimistic and the share of analysts that are pessimistic was published by the ZEW. The result was positive, as there was a sharp rise from the last reading of 6.4 to 19.2 in June 2016.
Commenting on the report, Professor Achim Wambach, President of ZEW, stated, “The improvement of economic sentiment indicates that the financial market experts have confidence in the resilience of the German economy. However, general economic conditions remain challenging. Apart from the weak global economic dynamics, it is mainly the EU referendum in Great Britain which causes uncertainty”.
Overall, the result was impressive, but failed to lift the EURUSD pair, and it looks like the pair may close the opening week gap.
