German ZEW Survey Overview
The ZEW will release its German Economic Sentiment Index and the Current Situation Index at 0900 GMT in the EU session later today, reflecting institutional investors’ opinions for the next six months.
The headline Economic Sentiment Index is expected to fall to 73.0 in October as against a 77.4 reading booked in the previous month. Meanwhile, the Current Situation Sub-Index is likely to arrive at -60.0 versus a -66.2-figure recorded last month.
How could they affect EUR/USD?
Broad-based US dollar rebound amid resurgent safe-haven demand propels the drop in the EUR/USD below 1.1800. The J&J COVID-19 vaccine trial pause combined with a likely delay in the US fiscal stimulus deal weighs on the market sentiment. The focus now shifts towards the German ZEW Survey to gauge the next moves in the spot.
Should the German data beat estimates, the spot could revert towards 1.1800 (5 and 50-DMA). A break above which the next critical barrier at 1.1830 could be put to test.
On a disappointment, the rates could extend the retreat towards the 20-DMA support at 1.1749. The next downside cap is seen at 1.1732 (Oct 10 low).
At the time of writing, EUR/USD trades at 1.1782, down 0.26% on a daily basis.
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About German ZEW
The Economic Sentiment published by the Zentrum für Europäische Wirtschaftsforschung measures the institutional investor sentiment, reflecting the difference between the share of investors that are optimistic and the share of analysts that are pessimistic. Generally speaking, an optimistic view is considered as positive (or bullish) for the EUR, whereas a pessimistic view is considered as negative (or bearish).
Credit: FX Street