German ZEW Economic Sentiment is based on a monthly survey of institutional investors and analysts and their views of the German economy. A reading that is higher than the market forecast is bullish for the euro.
Update: Gernan ZEW recovers to 10.4
Here are all the details, and 5 possible outcomes for EUR/USD.
Published on Tuesday at 10:00 GMT.
Indicator Background
German ZEW Economic Sentiment surveys financial experts for their assessment of the direction of the German economy in the next six months, based on economic data including inflation, exchange rates and the stock market. This makes the index an important indicator of the economic outlook of the German economy for the next six months.
The indicator has been on a sharp slide throughout 2015 and dropped to just 1.9 points in October, compared to 12.1 points a month earlier. This weak reading was well off the estimate of 6.8 points. The downward slide is expected to reverse direction in November, with an estimate of 6.7 points.
Sentiments and levels
The recent consolidation by EUR/USD may have reached its end: after some doubts from the Fed and the ECB, the weak GDP data out of the Eurozone and Draghi’s dovish talk are weighing on the euro. Even if the Fed is very cautious about a hike and not rushing towards it, weakness in the euro-zone is setting the tone for the pair. So, the overall sentiment is bearish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.10, 1.09, 1.0830, 1.0710, 1.0615 and 1.0550.
5 Scenarios
- Within expectations: 3.0 to 10.0: In such a case, the euro is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 10.1 to 14.0: An unexpected higher reading can send EUR/USD above one resistance line.
- Well above expectations: Above 14.0: In such a scenario, a second resistance line might be broken.
- Below expectations: -1.0 to +2.9: A sharper decrease than forecast could push the pair below one support level.
- Well below expectations: Below -1.0: A very weak release could rattle the markets, and EUR/USD could break a second support level.
For more on the euro, see the EUR/USD