The EUR experienced a bullish day of trading yesterday against the USD, mainly due to the German ZEW economic expectation figure. The ZEW indicator jumped to 44.8 in June from 31.1 in May. This suggests that analysts and investors were not as grim about the economy as before. In other words, the improvement in this consumer sentiment signals that the worries about a further aggravation of the economic recession may be limited by the end of the year. The reading is now firmly in positive territory, which indicates that optimists far outnumber pessimists.
Since the release of this important figure earlier yesterday the EUR has climbed against the USD, and continued during today's trading session and closed at 1.3835, as trader confidence returned back to the EUR. A strong EUR may continue in the coming days if the European economy continues to release better-than-expected economic figures. If this does occur, the confidence of investors may continue to return back to the EUR in the short-term.
Looking ahead to today, the Euro-Zone and Britain are set to publish a number of important data releases. These include the British Claimant Count Change at 8:30 GMT and the Euro-Zone Trade Balance at 9:00 GMT. These figures are likely to determine the GBP and EUR's strength going into end-of-week trading. Forex traders are also advised to closely follow the speech coming from U.S. Fed Chairman Ben Bernanke, as the forex market is likely to be very volatile while he speaks.