Global macro overview for 16/11/2016:
According to the Center of European Economic Research, the economic sentiment continues to improve in Europe. The ZEW surveys provide insight into the mood of institutional investors and analysts. Yesterday the ZEW report for Germany showed a sharp gain of 13.8 points, well above the forecast of 7.9 points. The Eurozone sentiment indicator improved to 15.8, above the estimate of 14.3. In conclusion, both indicators posted 4-month highs and pointed to strong optimism over economic growth in the Eurozone, which is interesting amid global uncertainty after the surprise victory of Donald Trump in the presidential election. His international policy towards the Eurozone might deeply affect the relationship between the US and Europe if he starts to implement his election pledges during the presidential race.
Let's now take a look at the EUR/USD technical picture at 4H time frame after the news release. The bears have managed to test the recent low at the level of 1.0709 and even slightly violate it, but the growing bullish divergence between the price and momentum oscillator suggests a relief rally to come shortly. The first target for this rally is at the level of 1.0760, then 1.0816 and 1.0849.
