The ZEW survey failed to inspire a rally in the euro tonight as the release printed a disappointing 38.7 reading against expectations of a climb to 44. Though other components of the survey generally came in line, including Current Situation status which posted -55.2 vs. -55 projected and the Economic Sentiment which registered 40 against 38.2 the news just too weak resist the assault of the greenback bulls and the pair promptly slipped below the 1.1700 figure as speculators made another run at yearly lows.

No doubt, higher oil prices and the lingering riots in France weighed on investor confidence, but the actual measure of economic activity in the Euro-zone surprised to the upside as both German and EZ GDP figures posted higher than expected results. German GDP showed a rise of 1.3% vs. expectations of 1.1% while EZ GDP grew at 1.5% rate. Though those numbers pale in comparison with US GDP data they do indicate that the 12 member block is slowly emerging from  economic hibernation. Furthermore the modestly positive economic growth  should offer support to ECB hawks who would like to raise the EU interest rate by 25bp at the December meeting.

The euro at this moment along with the yen has become a one way bet, which is always a precarious trade in the FX market. Admittedly there is little reason to be bullish the currency, however as we noted on Friday "the dollar is never more dangerous to the longs as when it looks to be the most invincible." With today's US Retail Sales expected  to print -0.7% vs. 0.2% the month prior event risk may lie with the dollar longs. However, if like the Terminator, the US consumer continues to plow on proving analysts wrong once again, EUR/USD may yet tumble to 1.1600 level as momentum will bulldoze through the last few euro longs remaining.

Boris Schlossberg is a Senior Currency Strategist at FXCM.