Earlier today, the ZEW Institute showed that its index of German economic sentiment fell to a 16-month low this month. Additionally, the ZEW Institute reported that its economic sentiment index for the entire euro zone also moved down to 55.2 in May, from a reading of 61.2 the previous month. These disappointing numbers pushed the common currency to a 1-month low against the U.S. dollar. In this way, EUR/USD dropped to its downside target, but is it enough to trigger a corrective upswing?
In our opinion, the following forex trading positions are justified - summary:
EUR/USD: short (stop-loss order: 1.4040)
GBP/USD (NYBOT:YPM14): none
AUD/USD: short (stop-loss order: 0.9410; initial price target: 0.9060)