German ZEW Sentiment Plunges
The Zentrum Für Europäisch Wirtschaftsforschung (ZEW), aka the Center for European Economic Research, has just published the key German Sentiment Survey figure for March. This number came in at a very low 46.6 against an expectation of 53, well down from the previous months 55.7, the failure of sentiment to recover following last months sharp drop is a large source of disappointment to the German economy.
Additionally, the ZEW figure for the Eurozone as a whole has equally disappointed, printing 61.5 against a consensus expectation of 67.3 and a previous month number of 68.5.
The ZEW is one of the primary monthly figures that drives the Euro, measuring sentiment in both the German and the Eurozone economies. Up to 350 economists are surveyed for their opinions on the strength and prospects for the underlying economy, deviations from expectations can have a strong and immediate impact on the single currency.
Going into these figures the Euro had been attempting to move higher but the weak Italian trade data gave the market the excuse it was looking for to postpone buying until better news came along. Technically speaking the key $1.39 support level held up quite nicely until the dramatic fall off in the sentiment indicator, EURUSD is currently looking for a bounce in the high $1.38s.
The Euro is now off the hook for the rest of the week, preliminary Consumer Confidence numbers late on Friday afternoon may provide a little direction but in reality this will be just another sentiment indicator that is unlikely contain any further surprises following today’s ZEW.
In the absence of any further escalation of the Crimean situation the Euro will spend the next few days at the mercy of technical traders. Despite today’s poor ZEW number both short and long term trends are higher for the single currency but with very strong resistance at $1.3930 and again at psychological $1.40 it is shaping up to be an interesting week for Euro traders.
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