Global macro overview for 16/05/2017:
The European ZEW Sentiment data beat expectations. Global investors expected ZEW at the level of 29.1 points but the figure revealed came in at 35.1 points, better than a month ago. On the other hand, the ZEW Sentiment index for Germany was better than a month ago at the level of 20.1 points, but below expectations of 22.3 points. The flash GDP reading from the Eurozone was in line with expectations at the level of 0.5% and the trade balance was better than expected as well (23.1Bln versus 18.8Bln a month ago). In conclusion, a bunch of good data from the Eurozone released this morning helped to improve the sentiment and the euro is rallying across the board.
Let's now take a look at the EUR/JPY technical picture on the H4 timeframe. The market is making a new higher high at the level of 125.36 at the time of writing. The price is still moving inside of a bullish golden channel. But there is a visible divergence between the price and the momentum oscillator. The market conditions are close to overbought, so if the level of the immediate support at the level of 124.51 is clearly violated, then the corrective pullback is in progress. The target is projected at the level of 123.26.
