What is this and where shoud it fit ?

[Black530i]

Hi,
Upon inspecting my M20 525i (1989), Dutch (Euro) model, I found this sensor (?) which seemingly is disconnected. But I can't find where it should be connected to and I also don't know what it does.

The electrical lead (top left one) goes into the cable-tree.
The other one (non-electrical, bottom left one) goes to some kind of the filter in the left-front of the car, next to the powersteering fluid reservoir.

What does it do and where should I connect it to ?

Thanks,

Ed,
The Netherlands