Tuesday’s Market Update

The EURUSD and GBPUSD are higher today as German ZEW Economic Sentiment figures were better than expected, while UK CPI was inline with 3.5% forecasts.  On the news, the EURUSD hit a high of 1.3170 and has continued to build on yesterday’ strength to trade at a current 1.3150.  Meanwhile, the GBPUSD is closing in again on the 1.6000 figure as it hit a 1.5968 high.


More on the ZEW numbers from Bloomberg:

German investor confidence unexpectedly rose to a two-year high in April, suggesting Europe’s largest economy can weather the resurgent debt crisis in the euro region’s periphery.
The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, increased to 23.4 from 22.3 in March. That’s the fifth straight gain and the highest reading since June 2010. Economists forecast a drop to 19, according to the median of 39 estimates in a Bloomberg News survey.  Read More

Looking ahead for the EURUSD, Forex traders will be watching for further confirmation that Friday's selloff was a one off event.  As such, traders will continue to be watching the 1.3000 figure this week, for a restest of the critical support level.  On the upside, the EURUSD could see resistance as it approaches the 1.3200 figure and nears last week's high (see chart).