The German ZEW economic sentiment rose to 53 points, far better than expected. This helps EUR/USD stabilize after a few bad days. Other figures also shined on the Euro. Will the figures overcome the Greek fears? Update on the factors moving the Euro.
After 6 months of drops, some of them which were a big burden on the Euro, the German ZEW economic sentiment finally went up, and did it a neat way: from the bottom of 44.5 points last month it was expected to rise to 45.2 but scored 53 points, far better than expected. This was not the only positive surprise in Europe:
A big surprise was seen also in the all-European figure – it leaped from 37.9 to 46 points, when 38.9 was expected. The German figure is considered more accurate, but this helped as well.
Also Europe’s current account exceeded expectations: a deficit of 3.9 billion was reported, better than 5.3that was predicted. Last month’s number was revised to the upside.
Earlier, German PPI rose by 0.7%, higher than 0.5% that was predicted. Last month was unchanged. A rise in prices could force Trichet to think of a rate hike. Not in the far future. Note that also in Britain, inflation is on the rise.
All these good figures helped the Euro stabilize around 1.35. This line, 1.35, was the closing line two weeks ago and also last week. This week began with a drop of EUR/USD below this line, with a weekend gap. The pair went as low as 1.3418 and now its settling around 1.35.
On the hand, the Greek crisis is far from over, and it’s still weighing on the currency. Any news coming from the EU, the IMF or from Greece concerning the Greek bonds or the German ability to help will still move the Euro, but the movements will be less strong – the Euro can lean back on some improving factors.
The lines to watch are 1.3380 as a strong support line, followed by 1.3267 – the year to date low. Looking up, the pair will find resistance at 1.36, a swing high and then by 1.37 – a peak that the Euro reached last week on big hopes about Greece. The biggest hurdle on the upside is 1.3850 – after the Euro failed to breach this line, it made a big collapse.
There are many more figures coming Europe, with the Ifo Business Climate on Friday being the most important one. This indicator was better than others, and is expected to rise once again.
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