Eurozone Investor Confidence Continues to Grow
The Eurozone’s Sentix Investor Confidence number for March has just been published at 13.9, this is close to consensus of 14.0 and up on the February reading of 13.3.
The Sentix is an important sentiment figure for the Eurozone, taking account of the opinions of over 1,600 market participants on 36 separate economic indicators it provides a good sense of ‘market’ expectations over the coming month.
After 2 years in negative territory, Eurozone investor confidence turned positive in October last year and has continued to trend upward since.
The Euro, which broke new ground last week, has reacted slightly nonchalantly to this mornings sentiment number, if anything undergoing a slight sell off which appears to be more a continuation of a short term technical trend than any reaction to the investor confidence number.
Last week the European Central Bank (ECB) provided the impetus to enable the single currency break through long term resistance at $1.3815. The Euro now has $1.39 firmly in its sights but was held back by the Dollars positive Non Farm payroll numbers last Friday.
The Euro remains very well bid and is showing no signs of giving up on it’s recent rally. $1.39 is a short term psychological level for the EURUSD and should give way with ease later in the week, possibly on publication of Germany’s trade numbers tomorrow morning but most likely markets will look to the ECB’s monthly report on Thursday to give the necessary boost to the single currency.
The real test for EURUSD will be around the 1.4070 level, this is long standing resistance dating back to 2011. If this pair can clear this hurdle on an early attempt then Euro upside will be set to continue for the foreseeable future. The risk is that this level proves too much in which case a failed breakout will only strengthen this resistance providing a strong cap on the Euro’s progress.
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