The highly regarded German ZEW Economic Sentiment for August rose to 42 points. It was expected to advance from 36.3 to 40.3 points, reflecting a more solid business environment. The all European number also came above predictions and hit 44 points. It was predicted to rise from 32.8 to 37.4 points. In addition, the euro-zone’s industrial production carried estimations of rising by 1.1% in June, following a drop of 0.3% beforehand. Strong German growth in this field raised expectations. However, the actual outcome was a rise of only 0.7%. This shows that Germany’s growth is disconnected from the rest of the continent.
EUR/USD was battling with the 1.33 line before the publication, trading just under the figure. The pair climbs above 1.33 after the release.
The “Current Situation†component of the ZEW survey was expected to rise from 10.6 to 12 points and it also surprised to the upside with 18.3 points. All in all, a positive report from the German think-tank, but the not-so-strong industrial output shows that Germany is not the locomotive for everybody, at least not yet.
After the pair failed to break above 1.34, it suffered a gradual slide all the way to 1.3280 and stabilized in this region. Support appears at 1.3255. Resistance is at 1.3350.
For more levels and analysis, see the EUR USD Forecast.
