Fate of the EUR/USD Downtrend Would Depend on the German Economic Sentiment

United States – Empire State Manufacturing Index

Today, at GMT 1:30 p.m., the Federal Reserve Bank of New York released the empire state manufacturing index, which measures the level of a diffusion index by surveying 200 manufacturers in the state of New York.

Since businesses are the first to react to changing market conditions, binary options traders consider this survey to be an important leading indicator of New York’s economic health. As New York makes up a large portion of the US economy, it can signal a larger trend in the overall US economy.

In October, the empire state manufacturing index reading came out at -11.4 and the forecast for November was set at an optimistic reading of -5.3. However, the actual index reading came out much worse than what the market was expecting, at negative -10.7.

Eurozone – German ZEW Economic Sentiment

Tomorrow, at GMT 10:00 a.m., the Zentrum fur Europaische Wirtschaftsforschung (ZEW) will release its German economic sentiment index, which measures the level of a diffusion index based on surveying 275 German institutional investors and market analysts.

Since the professional investment community, investors and analysts have the latest data; their reflection about the economy tends to be the most accurate. Therefore, binary options investors consider the ZEW’s German economic sentiment index to be a leading indicator of the entire Eurozone economy. This is because the German economy is one the most important driving forces behind the Euro currency.

Last month, the ZEW German economic sentiment came out at 1.9, and this month the forecast is set at a rather high level, at 6.7.

Trade Recommendation for the EUR/USD

EURUSDDaily

After the EUR/USD price penetrated below the long-term support line on November 4, it has mainly remained range bound for the last two weeks between 1.0670 and 1.0850. However, it has also developed a sharp downtrend line in the process.

As the German ZEW economic sentiment dropped for the last several months, the likelihood of the EUR/USD downtrend to continue is high. Hence, if the ZEW economic sentiment reading once again comes below expectations, the EUR/USD price may break below the support around 1.0670.

In that situation, it would be recommended that traders consider placing a PUT order for the EUR/USD with their binary options brokers at once the price closes below the 1.0670 level.

Recommended Broker: HighLow.net

About our Forex and Binary Options Analyst:  Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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