German ZEW Economic Sentiment (Aug) is scheduled to be announced later this morning with the previous figure at 59.3 and the forecast at 58.0. The Geman Dax is up over 200 points this morning and if better than expected numbers are announced, this could potentially signal that economic recovery in the Eurozone might be much sooner than expected. This will be extremely positive for the Euro which will add downward pressure on the U.S. Dollar. The Dollar Index has erased yesterday’s gains, where it closed at 93.58 and currently trading at 93.45. GBPUSD is in a trading range, where we see a rejection of lower prices from 1.3060 – 1.2981 and a rejection of higher prices from 1.3138 – 1.3185. Due to the mixed outlook for today’s U.K. data, I expect a continuation of the range trading and better than expected ZEW economic sentiment data might be the catalyst to move the GBPUSD towards 1.3138. However, the medium outlook for the British Pound remains bearish.
EUR/USD
The ECB said on Thursday it was increasing the overall size of its Pandemic Emergency Purchase Programme (PEPP) by 500 billion euros to 1.85 trillion euros. It extended the scheme by nine months to March 2022. Whilst on Friday, ECB policymaker Francois Villeroy de...