Today one thing becomes clear – today risk hunger in the markets is growing and getting bigger and bigger. How is that? Well, demand for safe havens is very-very low as for the critical situation that we see right now. It is especially seen in the recent performance of USD, JPY and gold. Especially USD. American dollar has been one of the most volatile currencies in the market for the last couple of weeks. This drove us to investing into riskier instruments, for example EUR. But, this decision may come back and bite us today, because today we are going to face German ZEW Economic Sentiment report.
What is it? It's a leading indicator of economic health - investors and analysts are highly informed by virtue of their job, and changes in their sentiment can be an early signal of future economic activity. And we all know, how markets and euro are reacting to German economic data for the last year? EUR does not really favor it as well as EUR/USD traders. German economy seems to have some troubles and of course, no one wants to deal with a troubled currency couple. Not when the choice of other instruments is so wide and broad.
So, in case you have bought EUR/USD recently due to its growth, today I would be on alert for reversals – remember, this is German economic data. Nothing good can come of it. Not now.
Use trading signals to make heads or tails of the situation.