By Samuel Indyk
Investing.com – breached its 50DMA to the upside at 1.2157 following stronger than expected data. The monthly survey from the German economic research institute showed investor morale above forecasts on expectations that consumption will improve in the month’s ahead. The economic sentiment index showed a rise to 71.2 points from 61.8 previously.
“The financial market experts are optimistic about the future,” ZEW President Achim Wambach said. “They are confident that the German economy will be back on the growth track within the next six months.”
After breaching the 50DMA in the wake of the data, EUR/USD has continued to push higher towards 1.2200 where there is large sized option expiry interest. Approximately €1.5bln of option expiries are due to roll off today at the level at the 10am NY cut (1500GMT). Furthermore, there’s €639mln at the 1.2150 level. Both could attempt to exert magnetism heading towards the latter part of the European session.
EZ growth not as bad as feared
Further supporting the EUR today is better than expected Eurozone growth data. Fourth quarter fell by 0.6% QoQ, rather than earlier estimate of 0.7%. Growth is likely to get worse in the first quarter with the Eurozone likely suffering a double-dip recession, however, there is optimism that the vaccine rollout and shrinking case numbers could see economies begin to open up sooner rather than later.
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