Germany’s ZEW index mirrored a sharper than anticipated fall in present circumstances and expectations in September, Scotiabank’s Chief FX Strategist Shaun Osborne notes.
Technicals stays bullish
“This index tends to be unstable, reflecting sentiment generally formed by market volatility, however German traders are clearly involved by indicators of slowing development. The EUR drifted again marginally from its intraday peak across the information’s launch however stays comfy buying and selling above the 1.11 space.”
“The EUR’s progress by way of the ceiling of the downward-sloping consolidation vary in growth for the reason that finish of August suggests extra positive factors within the close to/medium time period for spot. The vary escape has triggered a bull flag sample on the charts which suggests the current uptrend in spot can resume.”
“The one caveat is that spot appears—to date—reluctant to push on increased in the direction of 1.12. That isn’t too shocking, given the elemental backdrop for markets this week. Nevertheless it highlights the danger {that a} failure to develop positive factors dangers dumping spot again to the decrease finish of the vary within the higher 1.09s.”
