The Euro finally managed to gain a few bids yesterday, as there were some important releases lined up during the London session. The main ones are the German and Euro zone ZEW economic sentiment. The end result was on the positive side, as the sentiment exceeded the forecast and jumped sharply higher compared with the last reading.
The Euro was seen trading higher against other major currencies like the US dollar and the Australian dollar.
Moving ahead, there are a few other important releases lined up during this week which might affect the Euro in the near term. The main ones to keep an eye on are the manufacturing and services PMI’s for Germany, Italy, France and the Euro zone. The market is again expecting a minor improvement this time. Let us analyze a few releases and check how the Euro might trade in the coming sessions.
German ZEW Economic Sentiment
The first important release in the Euro zone was the German ZEW economic sentiment. The forecast was slated for a rise of around 4 points from the last time decline of 3.6. However, the outcome was way above the expectation, as the German ZEW economic sentiment came in at 11.5, up by more than 15 points. The gain was appreciated in the report published as well, as the ZEW President Professor Clemens Fuest stated that “ZEW’s Indicator of Economic Sentiment for Germany has increased for the first time in 2014. The recent growth figures for the euro area suggest that the economy is stabilizing, which contributed to the indicator’s increase”.
The EURUSD pair spiked higher immediately after the release as the outcome was very bullish for the Euro. As sharp gain in the sentiment might boost the Euro in the short term and could decrease some pressure from the Euro bulls.
Euro Zone ZEW Economic Sentiment
The Euro zone ZEW economic sentiment was also released around the same time. The outcome was similar to the German one. The forecast was slated for a minor rise this time from 4.1 to 4.3. However, the outcome was much better as the Euro zone ZEW economic sentiment came in at 11, which is around 6.9 points higher in November 2014.
Overall, the outcome was on the positive side, which might continue to support the Euro in the short term. We need to see how the pair trades in the coming days, and how upcoming releases shapes out.
US PPI
There was one important release lined up in the US yesterday, as the Producer Price Index was released by the Bureau of Labor statistics. The forecast was slated for a decline of 0.1% in October 2014, compared with the preceding month. However, the outcome was above the forecast as the US PPI rose by 0.2%.
Technically, the EURUSD pair has a solid resistance around the 1.2550-80 area, which might continue to cap the upside in the pair. A break above the same could take the pair towards the 1.2700 level. On the downside, the 1.2510 level is a major swing level in the EURUSD pair in the short term.
So, keep an eye on all the important levels friends and trade accordingly.
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