Stay short on EUR/GBP after ZEW economic sentiment deteriorates further
The situation for the euro is getting worse every day as all sectors of the economy continue to cool, while prices continue to climb, putting the consumer in a difficult situation and scaring away investors. As a result, the Euro has fallen and after a short-lived bounce late last week, this pair has reversed and is now threatening parity for the first time since 2002.
The ZEW Economic Sentiment for the Eurozone and Germany was released some time ago. These indicators were expected to decline this month as the energy crisis continues to approach, as does inflation. We opened many sales EUR/USD signals and last friday we decided to sell EUR/GBP as well.
EUR/GBP H1 chart – The rally seems over
AMs again act as resistance
EUR/GBP has turned bearish, although the situation for GBP is also quite bad, despite the ECB raising interest rates several times since December last year. We decided to open a forex sell signal last Friday and last night the price missed our take profit target by one pip. But, the upper retracement seems complete on the H1 chart, so this pair should resume its decline soon.
Germany July ZEW Economic Sentiment Survey
- July ZEW Economic Sentiment -53.8 points vs. -38.3 expected
- June Zew’s sentiment was -28.0 points
- Current conditions -45.8 points against -34.5 expected
- Previous conditions were -27.6 points
Slight delay in publication by the source. This is a significant failure as ZEW notes that the combination of energy supply concerns in Germany, planned rate hikes by the ECB and further pandemic-related restrictions in China have led to a significant deterioration in the economic outlook.