It gets worse in Germany: the ZEW economic sentiment fell to -3.6 points. The negative number reflects pessimism. This is the lowest since November 2012. The current situation component disappoints with 3.2 points. The euro-zone number is only at 4.1 points. Industrial output in the euro-zone fell by 1.8% m/m and 1.9% y/y. All the figures are below expectations.
EUR/USD now extends its drops, falling towards support at 1.2660.
It’s all negative for the euro-zone figures. Germany is on the verge of recession and if the locomotive cannot move the zone forward, who can?
The German ZEW Economic Sentiment was expected to slide to 0.2 points in October from 6.9 in September, indicating very minimal optimism and continuing the slide seen since early in the year. The Current Situation component was predicted to slide to 18 points. the all European number was expected to be halved to 7.1 points. At the same time, euro-zone industrial production carried expectations for a drop of 1.6% in August m/m, and 0.9% y/y.
EUR/USD traded just under 1.27 towards the release, sliding from the highs after weak inflation data from France and Spain.
More opinions about EUR/USD:
- EUR/USD: We Went Long Targeting 1.31; Position For A Bounce – Credit Agricole
- EUR/USD forecasts cut by Goldman Sachs
Here is how it looks on the chart:
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