EUR/USD TALKING POINTS
- ZEW Economic Sentiment Index (JULY) – ACT: 0-53.8
EURO FUNDAMENTAL BACKDROP
The euro’s initial reaction to the ZEW economic sentiment index misses from both Germany and the eurozone respectively (see economic calendar below) was expectedly negative testing the much talked about parity level. The -53.8 read for the EU region was the lowest print since November 2011 thus reiterating the fading level of optimism withing the eurozone. I believe the 1.0000 psychological support zone will not hold and is likely to be penetrated in the short-term. Risks facing further euro weakness include the potential energy crisis, an increasingly hawkish Fed and recessionary fears backing havens like the U.S. dollar. Looking ahead, U.S. inflation will be the focus tomorrow with markets looking for further guidance around the U.S. economy.
EUR/USD ECONOMIC CALENDAR
Source: DailyFX economic calendar
TECHNICAL ANALYSIS
EUR/USD DAILY CHART
Chart prepared by Warren Venketas, IG
Resistance levels:
- 1.0064
Support levels:
- 1.0000
- 0.9854
IG CLIENT SENTIMENT DATA: BEARISH
IGCS shows retail traders are currently LONG on EUR/USD, with 74% of traders currently holding long positions (as of this writing). At DailyFX we typically take a contrarian view to crowd sentiment resulting in a short-term downside bias.
| Change in | Longs | Shorts | OI |
| Daily | -1% | -4% | -3% |
| Weekly | 4% | -10% | -5% |
Contact and follow Warren on Twitter: @WVenketas
