German ZEW Preview: What to Expect of EUR/USD?
The EUR/USD
pair remains strongly bid above 1.13 handle in the European morning,
although eased-off highs following a positive start on the European
indices. The major finally broke above 1.1330 stiff resistance earlier
this session, as markets preferred to hold the European currency ahead
of the key risk event for the EUR today, the German ZEW economic
sentiment for April, which will is due for release at 09.00GMT.
German ZEW sentiment to improve notably in April
The
ZEW will release its Economic Sentiment Index for the next six months
for Germany, as well as the Current Situation Index, reflecting
institutional investors' opinions.
Economic sentiment is seen
heading higher to 8.2 in April from 4.3 booked in March, while the
Current Situation Index is expected to trend down to 50.4 from 50.7 in
the previous month.
The markets are expecting a strong
improvement in the April report as fears over Britain exiting the EU’s
membership appear to have eased a bit lately, particularly after the
latest Brexit poll results showing polls shifting in favour of the
‘remain’ camp. Moreover, with the price pressures picking up pace in the
Euro area as a whole, markets remain optimistic that the ECB easing
measures are finally yielding results.
A better-than expected ZEW
print is likely to bolster the ongoing bullish run in the EUR/USD pair
towards 1.1400 levels. However, the prices may breach 1.1300 support if
the data surprises markets to the downside.
EUR/USD: Technical levels to watch on ZEW
In
terms of technicals, the pair is likely to keep the bid tone intact on
an upbeat ZEW print, finding immediate resistance at 1.1393/1.1400 (Apr
13 High/ round number), above which 1.1450 (psychological levels and
previous tops) could be tested. Should the data negatively surprise
markets, the main currency pair could drift lower to the immediate
support placed at 1.1300/ 1296 (5-DMA/ 1h 50-SMA) below which at
1.1278/74 (daily S1/ Apr 18 Low) could be tested.
