EUR/USD (current price: 1.1035)
The German and the Eurozone ZEW Economic Sentiment Indices were both better than expected yesterday, adding to the bullish news of the German Trade Balance, as the continued weakness of the common currency still benefits the German economy, despite the weak overall growth in the region, and the uncertainty regarding some of the biggest banks in the country and broader Eurozone. The pair broke out from a consolidation pattern on Tuesday, as we expected, and it is down again this morning, as the 200-day MA might have turned into a resistance line, following several months of supportive action by the indicator.
Our assessment: The long-term direction of the cross might turn negative, especially if EUR/USD falls below 1.08 in the coming weeks, as all eyes are still on the FED’s interest rate policy.
