EURUSD Fragility Continues After Weak German ZEW Release
ZEW Data, EURUSD Price, Analysis and Chart:
- ZEW sentiment highlights weakness in German manufacturing sector.
- EURUSD remains fragile around 1.1300.
The latest ZEW sentiment readings point to continued weakness in the German economy, with no pick-up expected soon. The current situation survey fell to 15 from a prior 27.6 and missed expectations of 21, while the survey expectations remained weak at -13.4 compared to January’s figure of -15.0, well below the long-term average of 22.4.
According to ZEW President Professor Achim Wambach, ‘At the moment, we do not expect a rapid recovery of the slowing German economy. The economic situation in Germany has been weak, especially in the manufacturing sector. The figures for industrial production have once again seen a decrease, incoming orders are stagnant and foreign trade currently provides no fresh impulses. All of this is reflected in the fact that the assessment of the current situation has experienced a considerable decline. For the next six months, the financial market experts in our survey do not expect any improvement’.
Later this week, we have the preliminary Markit PMIs released on Thursday for Germany and the EU, while on Friday we have German Ifo data.
EURUSD continues to struggle to stay above 1.1300 and may make another attempt at last Friday’s recent low at 1.1230. The pair have stayed above 1.1300 recently, aided in part by a slightly weaker US dollar, but may break lower in the near-term if data at the end of the week misses expectations.
IG Client Sentiment data currently shows retail are 68.6% net-long EURUSD, a bearish contrarian indicator. However, the combination of current sentiment and recent changes gives us a mixed EURUSD trading bias.
EURUSD Daily Price Chart (July 2018 – February 19, 2019)
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