EURNZD: ZE and EU Economic Sentiment weighs on EURO

The Eurozone Economic Sentiment Indicator fell from 103.5 to 99.0 in July. Industry confidence fell from 7.0 to 3.5. Services confidence fell from 104.1 to 101.7. Consumer confidence fell from -23.8 to -27.0. Retail trade confidence fell from -5.2 to -6.8. Construction confidence fell from 103.5 to 99.0. The Employment Expectation Indicator fell from 110.2 to 107.0.

Economic Sentiment

The EU Economic Sentiment Indicator fell from 101.8 to 97.6. The Employment Expectation Indicator fell from 110.2 to 106.6. In the European Union, the decline in the ESI in July was due to significant losses in industry, services, retail trade and consumer confidence, while confidence in construction declined more slightly. The ESI fell sharply in four of the EU’s six largest economies, Spain (-5.0), Germany (-4.9), Italy (-3.4) and Poland (-3.2), while remaining generally stable in France (-0.1) and the Netherlands (+0.2). ¹) It is seen that this sentiment data report put pressure on the EUR in Thursday’s trading.

Meanwhile, in New Zealand ANZ’s business confidence increased from -62.6 to -56.7 in July. The outlook for own activity rose from -9.1 to -8.7. Employment intentions rose from 0.7 to 1.1. Price intention rose from 73.7 to 74.0. Inflation expectations rose from 6.02 to 6.23.

ANZ said most activity indicators were little changed, but housing construction intentions plunged back to a new record low (-73.7). Inflationary pressures remain strong, but may have peaked.

Technical Outlook

The EURNZD currency pair in trading Thursday (28/07) in the European session experienced another decline. The pair is still in bear dominance, having rebounded at 1.5592 unable to maintain its upward bias, despite having attempted to move higher twice by forming price peaks at 1.6839 and 1.6966. The intraday bias remains to the south side, with the possibility to test the 1.5928 price level before equalizing at 1.5592 lows. The price position is still below the 200-day exponential moving average and oscillations are still in the sell zone.


On the upside, a move above the minor resistance 1.6547 will confuse the outlook. However, as long as the trade is still below the price resistance structure of 1.7357, the prospect remains bearish.


²). ANZ-BusinessOutlook-20220728.pdf


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Ady Phangestu

Market Analyst – HF Educational Office – Indonesia


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