This Euro is finally showing some resiliency, as it managed to hold the ground against the US dollar and the British pound. The EURUSD pair after falling as low as 1.2850 managed to climb back higher. There were a few important economic releases yesterday, including the German ZEW economic sentiment, which failed to ignite upside in the pair.
German ZEW Economic Sentiment
Yesterday, the German ZEW economic sentiment was one of the major releases during the London session. There was something to cheer finally for the Euro bulls. The market was expecting the German ZEW economic sentiment to fall from 8.6 to 4.8. However, the outcome was not that bad as the market was expecting, as the report mentioned that the ZEW Indicator of Economic Sentiment for Germany stood at 6.9 points in September 2014. However, this is a disappointing reading, as it is way below the long-term average of 24.6 points. The most important point to note was that this was the ninth consecutive fall in the German ZEW economic sentiment.
Although, the Euro managed to survive, as the EURUSD pair was seen trading higher after the release. The pair jumped above the 1.2950 level, but failed to gain momentum.
Euro Zone ZEW Economic Sentiment
At the same time the Euro zone ZEW economic sentiment was also published. The market was expecting a minor decline from 23.7 to 21.3. The outcome was very disappointing, as the report highlighted that the Euro zone ZEW economic sentiment fell by more than 8 points from 23.7 to 14.2. Furthermore, the report mentioned that the Euro zone indicator for the current economic situation fell by 10.0 points to a value of minus 43.8 points.
This was very negative for the Euro, but considering the oversold readings on the larger timeframes, the EURUSD pair managed to sustain downside. However, the upside was also limited as there was no reason for the Euro bulls to take it higher.
US PPI Data
Later during the New York session yesterday, the US Producer Price Index was released by the Bureau of Labor statistics, Department of Labor. The forecast was slated for no change in August 2014. The outcome was as expected, as the US PPI was flat in August. Moreover, the US core PPI registered a gain of 0.1% in August, which is down from 0.2%. These figures are seasonally adjusted ones. This did not push the US dollar higher, as the EURUSD pair was unchanged after the release and was mostly raging. However, the US dollar traded a touch higher against the Japanese yen.
Moreover, later during the NY session, the US dollar was sold aggressively against almost all major currencies. The EURUSD held the 1.2940 support area very well, and gained intraday. There is an important resistance area around the 1.3020 level. If the pair manages to settle above the same, then a move towards the 1.3150 is possible in the near term. On the downside, initial support is around the 1.2920 level, followed by the last low of 1.2850 level.
So, keep an eye on all the important levels friends and trade accordingly.
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