The European currency managed to recover its positions after another attempt by sellers to resume the downward trend in the trading instrument. Good data on the ZEW index, which suggests a possible recovery of the German economy and the Eurozone in the 2nd quarter of this year, supported the demand for risky assets in the morning.
According to the report, the prospects for the German economy grew in April of this year, despite a slight deterioration in the assessment of the current conditions.
The report of the ZEW research Institute indicates that the index of economic expectations of ZEW in April 2019 rose to 3.1 points from a negative value of -3.6 in March this year. However, let me remind you that the average value of the index is 22 points. Economists had forecast the index to rise to 1.5 points in April.
A similar index for the eurozone in April of this year was 4.5 points against the March value of -2.5 points. Economists had forecast an increase in the index in April to 1.5 points.
ZEW noted that the improvement of sentiment is directly related to the hope for more positive growth and development of the situation in the global economy. The index was supported by a recent Brexit deferment of six months.
However, we should not forget that other more important indicators, such as reports on orders and industrial production, still indicate the weakness of the German economy.
As for the technical picture of the EURUSD pair, the formation of the upper boundary of the new downward channel continues to be seen on the chart, therefore, it is rather problematic to talk about the further growth of the euro. Only a confident consolidation above the resistance of 1.1315 will return an upward impulse to risky assets, which will lead to a test of new weekly highs around 1.1360 and 1.1390. The downward movement in euros, which can be formed at the beginning of this week, will be restrained by the levels of 1.1280 and 1.1255.
The British pound has completely ignored today's report on the number of applications for unemployment benefits, which was slightly higher than economists' forecasts than expected. According to the data, the number of applications for unemployment benefits in the UK increased by 28,000 in March of this year, while economists had expected growth of only 17,000. In February, the same indicator showed an increase of 26,000.
The average earnings in the UK for the period from December to February 2019 increased by 3.4%, which fully coincided with the forecast of economists. The overall unemployment rate from December to February remained unchanged at 3.9%.
The material has been provided by InstaForex Company - www.instaforex.com