Euro dips after much weaker than expected sentiment data. German ZEW economic sentiment dropped to 5.1 in March, down from 17.8, below expectation of 13.0. Current situation gauge dropped to 90.7, down from 92.3, above expectation of 90.0. Eurozone ZEW economic sentiment also dropped sharply to 13.4, down from 29.3, missed expectation of 28.1.
ZEW titled the release as “Economic Outlook Worsens Considerably” which is an indication of how bad things turned. ZEW President Professor Achim Wambach noted that “concerns over a US-led global trade conflict have made the experts more cautious in their prognoses. The strong euro is also hampering the economic outlook for Germany, a nation reliant on exports.” But he added that “combined with the experts’ continued positive assessment of the current situation, however, the outlook is still largely positive.”
While EUR/USD drops notable after the release, there is no change in it’s mildly bullish outlook. That is, price actions from 1.2445 are viewed as a corrective pattern. It should have completed with three waves down to 1.2257 already. Or in a worse scenario, it’s extending as a five wave triangle pattern. In either case, further rise is expected soon through 1.2445 to real key resistance at 1.2555.
