German ZEW Economic Sentiment disappointed and dropped more than expected: from 43.3 to -48.3 points. This 5 point drop in negative territory is worse than expected to -44.8. Also the all-European figure and current condition number fell.
EUR/USD confirmed the loss of the 1.37 line and is now getting close to the next support line at 1.3630.
Adding fuel to the fire was the head of the ZEW institute, that said that Germany might enter a “soft recession”. It’s important to note that the ZEW indicator is usually pessimistic, and tends to disappoint many times. But also the Ifo figure, which tends to be optimistic and exceeds expectations, has also been falling.
Further support is at 1.3550, followed b 1.3450. 1.37 now turns into resistance, followed by 1.38. For more lines and events, see the EUR/USD forecast.
These bad news join the growing uncertainty about a comprehensive solution to the European debt crisis, that has been weighing on the euro since yesterday.
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