EUR Boosted by ZEW Survey Data, Technical Forecasts Suggest a Further Retreat in EUR/USD is Likely
The Euro (Currency:EUR) is firmer across the board on Tuesday morning in London.
ZEW Survey outcome is ahead of analyst expectations
The key driver of Euro exchange rate strength on Tuesday morning comes courtesy of the Zentrum für Europäische Wirtschaftsforschung (ZEW) which measures institutional investor sentiment, reflecting the difference between the share of investors that are optimistic and the share of those that are pessimistic.
Today's reading came in at 44, well above expectations for 37.4 and a big improvement on the previous reading at 32.8.
The technical outlook for the Euro
We now turn to those tasked with forecasting the likely path the Euro Dollar exchange rate is to take based on current and historical price action.
Leander Dreyer at Jyske Bank says:
"We expect that EURUSD will continue to test the downside prior to the release of today's most important economic indicato- retail sales in the US.
"It is expected the figure will come out at 0.3%, i.e. a tad lower than last month. If we get a positive surprise, EURUSD will break out below 132.50-60.
"If we see a breakout below the red support line, EURUSD will test the range of 130-131."
ICN Financial Markets say:
"The pair is trading in a negative bias below 23.6% correction at 1.3315 shown on graph. Meanwhile, the pair is trading above key resistance level represented in the extended line starting from top 1.3711 passing by the next top at 1.3416. Therefore, the possibility of bringing back the upside move is valid today if the pair stabilized above 1.3315 levels.
"The trading range for today is among the key support at 1.3205 and key resistance at 1.3485.
"The general trend over short term basis is sideways targeting 1.2775 as far as 1.3600 is daily-closing."
RoboForex say:
"The H4 chart of the EUR/USD currency pair the resistance level of the bearish Tower 19.06 pattern and a bearish tendency, which started after Harami pattern. Three Line Break chart and the resistance of the black candlesticks confirm a descending movement; Heiken Ashi candlesticks indicate the correction."
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Luc Luyet at MIG Bank says:
"EUR/USD now lacks large impulsive moves which is suggestive that we are in the latter stages of the recovery from the 1.2755 low (09/07/2013). However, while above 1.3190 (02/08/2013 low) and 1.3266 (07/08/2013 intraday low) we continue to favour a retest of the key high at 1.3417 (19/06/2013)
"If a retest, or break over, 1.3417 can be achieved, the region between this key high and the annual high is expected to see a fair degree of resistance and is likely to offer a reasonable short entry opportunity."