German ZEW Overview
The ZEW will release its Economic Sentiment Index for the next six months for Germany, as well as the Current Situation Index at 0900 GMT in the EU session later today, reflecting institutional investors’ opinions.
The headline economic sentiment index is expected to drop further to -11.3 in October versus -10.6 last while the current situation sub-index is also likely to decelerate to 72.0 versus 76.0 booked in the month of August.
How could affect EUR/USD?
On a positive surprise in the headline reading, the EUR bulls could extend their control, pushing the EUR/USD pair back above the 1.1600 level. However, the spot could stall the bounce and drop back to the 1.1550 support area should the data show a bigger-than-expected drop.
FXStreet ´s Editor and Analyst, Haresh Menghani notes, “a convincing break below the 1.1530-20 region, nearing 23.6% Fibonacci retracement level of the 1.1815-1.1432 recent slide, will reinforce the negative outlook and turn the pair vulnerable to accelerate the fall towards 1.1480-75 intermediate support.”
“On the flip side, attempted moves beyond the 1.1600 handle might continue to confront some fresh supply near the 1.1615-20 region, coinciding with 50% Fibonacci retracement level. A convincing break through the mentioned barrier might negate the bearish setup and prompt some short-covering bounce, assisting the pair to aim towards reclaiming the 1.1700 handle”, Haresh adds.
Key Notes
Brexit and German ZEW amongst market movers today – Danske Bank
Germany: ZEW survey likely to show slight improvement in overall sentiment – TDS
EUR/USD points to some consolidation near term – Commerzbank
About German ZEW
The Economic Sentiment published by the Zentrum für Europäische Wirtschaftsforschung measures the institutional investor sentiment, reflecting the difference between the share of investors that are optimistic and the share of analysts that are pessimistic. Generally speaking, an optimistic view is considered as positive (or bullish) for the EUR, whereas a pessimistic view is considered as negative (or bearish).
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