German ZEW Survey Overview
The ZEW will release its German Economic Sentiment Index and the Current Situation Index at 1000 GMT in the EU session later today, reflecting institutional investors’ opinions for the next six months.
The headline Economic Sentiment Index is expected to rise to 60.0 in January as against a 55.0 reading booked in the previous month. Meanwhile, the Current Situation Sub-Index is likely to arrive at -68.0 versus a -66.5-figure recorded previously.
How could they affect EUR/USD?
EUR/USD remains capped by the 1.2100 level amid broad-based US dollar retreat. Prospects of further stimulus globally boost the market sentiment while weighing on the safe-haven US dollar.
The EUR traders digest the news that the European car sales plunged by 24% in 2020, the biggest annual drop since records began in 1990.
Attention turns towards the German ZEW Survey, although Treasury Secretary nominee Janet Yellen’s testimony will hold the key.
Should the German data beat estimates, the spot could finally recapture the 1.2100 level, with a move eyed towards the 10-DMA resistance at 1.2147.
The rates could extend the retreat towards 1.2057/54 (classic daily S1/ Monday’s low). The next downside cap is seen at 1.2040 (Dec 2 low).
At the time of writing, EUR/USD trades at 1.2087, up 0.09% on a daily basis.
Key notes
EUR/USD Analysis: Bears turn cautious ahead of ECB meeting on Thursday
Forex Today: Dollar retreats from highs ahead of Yellen's testimony, vaccine/virus news eyed
EU Commission to back plans for more economic, financial autonomy – Bloomberg
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).
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