EUR/USD Remains Tentative amid Pending “Brexit” Poll

Eurozone – German ZEW Economic Sentiment

Today, 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 6.4, and this month the forecast is set at a slightly lower level, at 5.1.

United States – Core Durable Goods Orders

On Friday, at GMT 1:30 p.m., the US Census Bureau released the month-over-month core durable goods orders figure, which measures the changes in the total value of all new purchase orders made to the US manufacturers for durable goods over the past month. However, the US Census Bureau excludes goods from the transportation sector in this figure in order to offer an accurate picture.

Binary options traders consider the US core durable goods orders to be the primary gauge of production situation in the economy, as an increase in purchase orders indicates that US manufacturing activity and growth will happen in the near future. Hence, it is one of the key leading indicator of the overall US economy.

Last month, the US core durable goods orders increased by 0.5% and the forecast for this month is currently set at an additional increase of 0.1%.

Trade Recommendation for the EUR/USD

EURUSDDaily

Since breaking below the uptrend line on May 13, the EUR/USD has mostly remained in a tight range between 1.1150 and 1.1435 levels.

Last week, the EUR/USD formed a large bullish pin bar, and the price opened with a gap this week to validate the bullish momentum in the market. But, yesterday, the EUR/USD formed a bearish outside bar (BEOB), which indicated a certain degree of tentativeness in the market as well.

As the US core durable goods orders are expected to rise once again and the German ZEW economic sentiment is expected to drop this month, the fundamental outlook for the EUR/USD also supports the thesis that the outlook for the pair would likely remain bearish this week. However, given that the EUR/USD’s current momentum is very bullish, if the price breaks above the BEOB’s high, it would likely to continue moving upwards this week. Also, the Brexit poll this week can totally change all the analysts’ hypothesis and make the market highly volatile.

Hence, under the circumstances, it would be recommended that binary options traders consider placing a CALL order for the EUR/USD with their binary options brokers as soon as the price penetrates and closes above yesterday’s high, which is at 1.1385 level.

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