The Euro managed to recover from 6 month lows on Tuesday as the German ZEW survey of investor sentiment rose more than expected to -55.5 in August from a record low of -63.9.
It appears that falling oil prices and a weakening euro helped to boost confidence in the outlook, which is similar to what we saw in the latest US consumer confidence reports. However, investors remain concerned about current conditions, as this component was worse than expected at -9.2, down from 17. Nevertheless, the move in EUR/USD likely had more to do with the fact that the pair was simply very oversold, and with forex positioning showing that traders are turning increasingly bearish on the pair, the contrarian indicator suggests that the pair should rise further.
