Another slide in business sentiment, but this time it’s a bigger disappointment: only 27.1 points. The German ZEW Economic Sentiment was expected to stand at 28.9 points in July, just below 29.8 points seen in June. The current situation component carried expectations of ticking down from 67.7 to 67 points but it dropped all the way to 61.8 points. . The all-European number was expected to rise to 62.3 points and it dropped to 61.8 points.
Before the publication, EUR/USD traded just above 1.36, in a very tight range. It is now trading under 1.36. It is important to note that in many previous cases of dips on weak European data, these were followed by a recovery – a “buy the dips” move.
The ZEW indicator has been on the fall for many months, but still remains on positive territory, reflecting optimism.
Support awaits at 1.3585, followed by 1.3550. On the topside, 1.3610 is weak resistance, and it is followed by 1.3650, which is already a very strong line.
For more, see the EURUSD prediction.Get the 5 most predictable currency pairs