Article by ForexTime
The Euro gained traction against the greenback in the wake of the Chinese devaluation of the yuan against the dollar. The Zew survey showed that investors expect interest rates in the EU to remain low for an extended period of time. The currency pair attempting to break higher after holding support near the 20-day moving average.
The ZEW shows investors expect steady short term rates for the Eurozone, and EUR appreciation against yen and Swiss franc. The details of the latest ZEW survey show that investors expect steady interest rates in the Eurozone, but the number of respondents seeing a rise in U.S., but also U.K. short term rates within the next 6 months has increased markedly.
At the same time, the details of the survey show that for the first time since at least November last year, investors expect the CHF to ease slightly against the EUR, although the balance of -0.5 reflects a majority that expects no change, with the number of those expecting the franc to decline against the euro relatively small at 14.5%, although marginally higher than the 14% that expect the franc to appreciate against the euro.
The EUR/USD was able to hold support near the 20-day moving average at 1.0950, and generated a higher high today with a target of resistance near 1.1110. Momentum has turned positive with the MACD (moving average convergence divergence) index generating a buy signal. The index is printing in the black with an upward sloping trajectory.
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