German ZEW Economic Sentiment Leaps – EUR/USD follows

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The important German ZEW Economic Sentiment indicator rose from 31.5 to 48.2 points. Early expectations stood on a rise to 35.3 points. Also the all-European surprised to the upside, rising from 31.2 to 42.4, also beyond expectations. If the euro is a proxy for Germany, bulls are now sighing a sigh of relief. This is the highest score since April 2010.

EUR/USD traded around 1.3350 prior to this publication, maintaining the narrow trading ranges seen beforehand.  It is now on the rise, and made it all the way to 1.3374 before retreating a bit.

EUR USD Higher on Strong ZEW Economic Sentiment from Germany February 19 2013

Update: The enthusiasm has been curbed: EUR/USD is back under 1.3350.

This figure strengthens the notion that Germany’s big dive in Q4, a contraction of 0.6% in GDP, was a one time event. ZEW and IFO are considered good gauges for the economy. However, they are not 100% accurate.

The euro is still looking for a direction, after getting hit by Draghi and later by the GDP numbers last week. The euro-zone is in recession, while Germany only saw a one time dip after quite a healthy year.

Resistance is at 1.34, followed by 1.3486. Strong support is at 1.3290. For more, see the EURUSD forecast.

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Yohay Elam – Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I’ve accumulated. After taking a short course about forex. Like many forex traders, I’ve earned the significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I’ve worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.