The important German ZEW Economic Sentiment indicator rose from 31.5 to 48.2 points. Early expectations stood on a rise to 35.3 points. Also the all-European surprised to the upside, rising from 31.2 to 42.4, also beyond expectations. If the euro is a proxy for Germany, bulls are now sighing a sigh of relief. This is the highest score since April 2010.
EUR/USD traded around 1.3350 prior to this publication, maintaining the narrow trading ranges seen beforehand. Â It is now on the rise, and made it all the way to 1.3374 before retreating a bit.
Update: The enthusiasm has been curbed: EUR/USD is back under 1.3350.
This figure strengthens the notion that Germany’s big dive in Q4, a contraction of 0.6% in GDP, was a one time event. ZEW and IFO are considered good gauges for the economy. However, they are not 100% accurate.
The euro is still looking for a direction, after getting hit by Draghi and later by the GDP numbers last week. The euro-zone is in recession, while Germany only saw a one time dip after quite a healthy year.
Resistance is at 1.34, followed by 1.3486. Strong support is at 1.3290. For more, see the EURUSD forecast.
