EUR/USD extends its side-trend ahead of the European open, keeping range around 1.1270 levels, as markets remain wary entering into fresh positions ahead of the main risk event for the week, the Jack Hole Symposium, where Fed Chair Yellen will make a scheduled speech on Friday.
In the meantime, markets look forward to the German Ifo surveys lined up for release at 0800GMT in the European session this Thursday.
Ifo to improve slightly in August
The headline Ifo Business Climate Index is expected to tick higher to 108.5 in Aug, from the 108.3 booked last month. The Current Assessment sub-index is seen higher at 114.9, compared to 114.7 last, while the Ifo Expectations Index - indicating firms' projections for the next six months - is also expected to head north to 102.5 from the 102.2 registered previously.
The Surveys are expected to show a slight improvement in the business conditions in Germany, which may offer some respite to the EUR bulls after yesterday’s unimpressive final German GDP data. On a bearish surprise, the EUR/USD pair could drop below 1.1250 support, while, the major could regain 1.13 handle if the German data surpasses expectations.
EUR/USD Technical Levels
Haresh Menghani, Analyst at FXStreet explains, “Following a break below a short-term ascending trend-channel, the pair is now consolidating around 50- SMA (4-hourly) and now seems to extend the corrective move towards 100-SMA (4-hourly) support near 1.1225-20 region. The downslide could further get extended towards an important confluence support near 1.1185-80 region, comprising of 50-day and 100-day SMAs.”
“Meanwhile on the upside, any recovery move beyond 1.1280 immediate resistance could provide a temporary boost to the pair but is likely to be capped at the ascending channel support break-point, now turned resistance, near 1.1330-40 region. Only a sustained move back above this support turned strong resistance might negate near-term bearish expectations and assist the pair to resume its near-term bullish trajectory.”
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