EUR/USD Can’t Break Higher After Economic Sentiment Crumbles

The important ZEW Economic Sentiment survey fell once again, showing that Europe isn’t really doing much better than the US. The Euro erases early gains and drops.

German ZEW Economic Sentiment fell from 21.2 to 14 points. Early expectations stood on small slide to 20.9 points. The survey of 350 German institutional investors is a highly regarded survey, and the drop sends it much closer to the tipping point where optimism turns into pessimism – a negative score. The Euro is retreating:

EUR/USD now trades at 1.2870 after dropping from 1.29 – gains that it made earlier. These move mean that EUR/USD failed to break the 1.2880 resistance line, at least for now.

A significant drop will send the pair towards the 1.2722 support line, which held it at the wake of the new week. A rise will find resistance at the round number of 1.30.

Note that the ZEW Economic Sentiment for the whole Euro-zone rose from 10.7 to 15.6 points, but this considered less accurate.

Earlier today, the Current Account for the Euro-zone was published. It showed that the deficit dropped to 4.7 billion. This was worse than earlier expected – 3.7 billion. Also last month’s figure was a disappointment – it was revised from a deficit of 5.8 to 7.4 billion. The Euro shrugged off this data, as it was awaiting the main figure.

The Euro went up earlier today on successful Irish bond sales. This is another positive sign that the debt issues are fading away. Ireland is one of the problematic countries in terms of debt.

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