ZEW Economic Sentiment decreased less than expected

The ZEW Indicator of Economic Sentiment for Germany has declined for the second consecutive time in February 2016. The index has decreased by 9.2 points compared to the previous month, now standing at 1.0 points (long-term average: 24.6 points). Analysts were anticipating decline to 0.1."The looming slowdown of the world economy and the uncertain consequences of the falling oil price put a strain on the ZEW Indicator of Economic Sentiment. In view of these developments, the concern over an increased credit default risk has already caused stock and bond prices for many banks in Europe, Japan and the US to slump," says Professor Sascha Steffen, head of the "International Finance and Financial Management" Research Department at ZEW.

The assessment of the current economic situation in Germany has also slightly deteriorated. Falling by 7.4 points, the index now stands at 52.3 points. Financial market experts’ sentiment concerning the economic development of the Eurozone has weakened.  ZEW's Indicator of Economic Sentiment for the Eurozone has decreased by 9.1 points to a reading of 13.6 points. Falling by 0.5 points in February 2016, the indicator for the current situation in the euro area has dropped to a value of minus 8.0 points.

Euro is currently being traded around 1.1180 area. Pair is likely to find support around 1.11 handle and resistance above 1.1250 level. Later today, in the US session, Empire State Manufacturing Index figures are scheduled for a release.

EUR/USD Daily Forecast – 16 February

Eurozone, yesterday, Eurozone Trade Balance figures were released. The first estimate for euro area (EA19) exports of goods to the rest of the world in December 2015 was €167.5 billion, an increase of 3% compared with December 2014 (€162.1 bn). Imports from the rest of the world stood at €143.2 bn, also a rise of 3% compared with December 2014 (€138.5 bn). As a result, the euro area recorded a €24.3 bn surplus in trade in goods with the rest of the world in December 2015, compared with +€23.6 bn in December 2014.

EUR/USD Daily Forecast – 16 February

Euro was pushed lower in the course of the Monday's session, continuing Friday's downtrend. Pair broke below 1.12 handle, and found some amount around 1.1120 area in order to rebound slightly by the end of the session. As for tomorrow, we believe that ZEW Economic Sentiment will bring some volatility to the markets. We can expect some amount of support around 1.11 handle, previous resistance and 1.1050 level in extension, while area above 1.12 handle, and 1.1250 handle in extension should offer some amount of resistance. Read more...

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