EUR/USD on fresh four-month highs after German ZEW data

The euro rose to a new four-month high versus the US dollar on Tuesday after official report said that the ZEW index of economic sentiment in Germany rose more than projected in June.

EUR/USD pair hit 1.3399 at 9:26 GMT, currently the session high and highest since February 20th, after which the pair consolidated at 1.3382. The cross was up by 0.13% for the day. Support was likely at 1.3325, the current session low, while resistance was to be encountered at 1.3434, February 20th high.

Earlier today it was reported that the ZEW Economic Sentiment indicator in Germany improved during June. It registered a 2.1-pct higher value, compared to that in the previous month, reaching 38.5. Current results exceeded preliminary estimates of a 38.1 reading. Experts projections were unchanged, regarding German economy. It is expected Euro zones largest economy to have gained momentum during the second quarter of this year. However, recent survey results stated that recovery would happen at a slower pace.

Additionally, German ZEW Current Situation indicator remained almost unchanged during June, as the latter diminished by a mere 0.3 pct to 8.6, mismatching projections of an increase to 9.5. ZEW Economic Sentiment in the Euro zone, as a whole, was higher by 3.0 pct in June, reaching the reading of 30.6, which was above expectations of a 29.4 value. ZEW Current Situation indicator in the Euro zone continued to deteriorate in June, falling to -79.5 from -76.8 in May.

Meanwhile, market players were focusing on Wednesday’s highly anticipated FED meeting for clues on monetary policy, after last month FED Chairman Ben Bernanke said that the bank could begin tapering asset purchases at some of the future meetings, if economic conditions were sufficiently good.

The euro extended gains to hit session highs versus the Japanese yen and the sterling. EUR/JPY pair advanced by 0.79% to 127.29, while EUR/GBP rose by 0.48% to 0.8543.