EUR gains extend on ZEW survey jump - Scotiabank

Germany's ZEW investor confidence survey had a serious glow up in the wake of the German government's plans to boost infrastructure and defense spending significantly. The Current Situation index remained soft at -87.6 in March but the expectations component jumped from 26.0 in February to 51.6, Scotiabank's Chief FX Strategist Shaun Osborne notes. 

Parliament poised to vote on spending

"Parliament will vote on the fiscal plans today (the upper house will vote at the end of the week) but, following talks last week, approval is all but a foregone conclusion. The plans could inject a serious (3-4%/GDP) amount of stimulus over the next few years. Ukraine peace talks may, at the margin, be helping EUR sentiment." 

"EUR/USD is stretching gains to marginal new highs this morning--fractionally above last week's peak but also fractionally shy of 1.1065 retracement resistance (76.4% Fib of the 1.12/1.01 move lower) on the daily chart. The trend in the EUR looks pretty robust though and gains are backed by solid trend momentum signals on the intraday, daily and weekly studies." 

"This suggests price action will be characterized by solid support for the EUR on minor dips (mid/ upper 1.08s) and an ongoing bid. A push through the 1.1065 point leaves little in the way of a rise to 1.12."