German ZEW investor confidence jumps to 19.5 in April, from 12.8 in March. The stronger than expected reading lifted the 3 months’ trend rate for the first time since January and with the current conditions indicator also improving the data suggests that the German recovery remains on track. Investors are also more optimistic about the situation as well as the outlook for the Eurozone as a whole and the stronger than expected number will add to the arguments of the hawks at the council, who are pushing for the central bank to at least drop the implicit easing bias and return to a more neutral stance on rates.
Eurozone industrial production dropped -0.3% m/m in February which can be downplayed as reflective of weather-related gyrations in the energy sector over the first quarter. Confidence numbers though have been encouraging and still suggest that the recovery continues, even if weather and Easter effect are likely to distort GDP numbers over the first two quarters of this year.
EURUSD ascended above 1.0600 following the forecast-smashing German ZEW confidence reading. The hourly chart for the pair prompted a LONG position due to the break of 50-period EMA and the upper Bollinger bands pattern. Hence, an entry was taken at 1.0609. A target was set at 1.0630, which is a confluence of 50.0 Fibonacci level. Target 2 is at 1.6500. RSI is at 68 sloping upwards, while Parabolic SAR turned positively earlier today. Additionally, in the 4-hour chart, the pair manage to break the 20 period EMA as well. EURUSD’s former trend support at 1.0610 coincides with the intraday high, and now marks resistance. Support is at 1.0567-70.
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