The German ZEW Survey is expected to show that the financial outlook declined in October as the current credit crisis stoked recession concerns. The sticky credit markets have made it difficult for business owners to acquire the necessary funding to fuel their business and for consumers to borrow for desired purchases.
Fundamental Outlook The German ZEW Survey is expected to show that the financial outlook declined in October as the current credit crisis stoked recession concerns. The sticky credit markets have made it difficult for business owners to acquire the necessary funding to fuel their business and for consumers to borrow for desired purchases. Yesterday’s bailout plan of the German banks by the government and the cumulative efforts of the G7 will not be included in this month’s reading, which may lead to traders discounting the results. Therefore, a dour print may not have the impact as previous releases on the EURUSD price action. Yet, a significant drop could weigh on the currency. Technical analysis is calling for further support for the Euro with 1.40 and 1.42 as its targets. A better than expected result should help achieve these targets as optimism should continue to improve as the credit markets start to lubricate. Technical Outlook
The rally from 1.3257 is an impulse, indicating that the trend is up towards 1.40-1.42. A B wave low may also be in place at today’s low (1.3456). A rally through 1.3686 warrants a bullish bias against 1.3456. Coming under there would not negate my bullish view; it would simply delay the larger advance. For More Technical Analysis Visit the Daily Technical Report To discuss this report contact John Rivera, Currency Analyst: jrivera@fxcm.com