The single currency continues on its way of recovery on Tuesday morning thanks to better-than-expected German business confidence surveys. This came in as a temporary relief in an otherwise extremely bearish market. There is still a long way to go before investors regain confidence in the euro. In the meantime, markets are waiting for US housing data to be released later today and a stronger dollar could pose threat to the euro’s pullback.
On the technical side, EURUSD bounced off the 61.8% (1.1280) Fibonacci level on the daily chart. We could see more consolidation on the way in the next few days. 1.1330 is the immediate resistance on the upside.
The sentiment-price correlation chart shows the sentiment rising back from its recent trough, which is in line with its improvement in the short run.