Euro Rallies on 9-Month High Economic Confidence
THE TAKEAWAY: Euro-zone economic confidence survey reaches a 9-month high -> Sentiment reflects ECB recovery forecast -> Euro rallies ahead of the Italian bond auction
Euro-zone economic sentiment rose to a 9 month high in February, according to the European Commission. The confidence survey was reported at 91.1, beating expectations for 89.9 and up from a revised 89.5 in January. The consumer confidence indicator was confirmed at -23.6 according to the final estimate for February.
The upturn in consumer confidence falls in line with the ECB prediction for a recovery later in 2013. However, the ECB also said the Euro-zone may see continued weakness in the current quarter, following three straight quarters of negative growth. Signs of a recovery and economic growth are Euro positive.
That is why the Euro rose more than thirty points against the US Dollar in Forex markets following the release. However, EUR/USD fell back below 1.3200 after an auction of Italian 10-year bonds, which suggested decreased trust in long-term Italian debt. Resistance may be provided by the first monthly pivot support line around 1.3184, and support may continue to be provided by the key 1.3000 level. (To learn how to incorporate overbought/oversold signals into your trading click here.)
EURUSD Daily: February 27, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .