EUR/USD: Bears struggle to make much progress post ZEW...

FXStreet (Bali) - EUR/USD ended the US session at 1.3366, erasing more than half the losses recorded in Europe, following a very poor ZEW economic survey in Germany.

As Jim Langlands, Founder at FXCharts, notes: "The German ZEW reading deteriorated sharply from 27.1 to 8.6 in August, far below expectation of 18.2 while the overall EU economic sentiment figure also tumbled from 48.1 to 23.7 versus consensus of 41.3.

Looking at the key movers for Wednesday, Jim adds: "Today we get plenty more data from the EU, with the focus being on the inflation readings from Germany/France/Spain and the EU Industrial Production; later in the day will see the release of the US Retail Sales for June (exp +0.2%mm)."

From an order flow perspective, it is worth noting that 1.3285-1.3365 remains a solid demand area, as per the demand imbalance seen during early Nov last year. While a short EUR squeeze should not be ruled out in the near term, there is plenty of technicals hurdles ahead that suggests sustained legs are unlikely, with supply at 1.3420-3445 (partly absorbed) followed by further cluster of offers expected at 1.3460 up to 1.35.