Eurozone current conditions slip again according to ZEW
While the ZEW indices are showing improvement in both the EU as a whole as well as Germany, the current conditions index in Germany has deteriorated again, falling from 15 in Feb to 11.1 in Mar. There is no response from the EUR at the present time, however, as we have identified that the focus is on the USD at the moment, and modest softening is pushing the EUR/USD rate into the 1.1375-1.1400 resistance zone.
Should the USD start to base out and move higher, we expect the lead spot rate to start to sink back, though there seems to be little momentum on the market and this is likely down to the focus on the FOMC meeting on Wednesday evening.
The crosses are also playing their part with EUR/CHF tightly contained inside the mid 1.1300's, and EUR/GBP is trying to base out as fresh nervousness starts to spread into GBP as the Brext date gets ever closer - without a credible outcome as yet.
Overall, the flow seems to suggest that the USD is the overriding driver in the market at present, so we anticipate some tight ranges up until the Fed announcement tomorrow night. The Fed will release a fresh dot plot and it seems the market is trying to front run a dovish outcome.