EUR/USD on the back foot, eyes German IFO survey
|- EUR/USD remains pressured ahead of German IFO Business Expectations data.
- Buyers are likely to stay on the sideline until the EU clarifies the fiscal stimulus package.
The single currency remains under pressure on Friday, keeping EUR/USD in the red near 1.0770 ahead of the closely watched German IFO Expectations released by the CESifo Group.
The readings for German IFO business expectations, climate, and current assessment data will be published at 09:00 and could influence the EUR pairs. Recently released economic data has made it quite clear that Germany's economy is suffering record falls in output due to the coronavirus outbreak. For instance, Germany's IHS Markit’s flash composite Purchasing Managers’ Index (PMI), which tracks the manufacturing and services sectors that together account for more than two-thirds of the economy, plunged to a record low of 17.1 in April from 35.0 the previous month, the official data released Thursday showed.
As a result, the focus on Friday will be on the Ifo's forward-looking business expectations reading, which is forecasted to drop to 75 from 79.7. A below-forecast reading will likely bolster the bearish pressure around the shared currency.
Alternatively, gains, if any, on the back of a big beat on data, may be short-lived, as the EuropeanUnion nations are yet to reveal the details of the fiscal stimulus package. The EU leaders, on Thursday, agreed to task the European Commission with revamping the bloc's next budget and devise a macro recovery plan but did not put the stimulus figure.
Post-Ifo data, the common currency's focus would shift to the US Durable Goods data and the Michigan Consumer Sentiment Index for April.
Technical levels
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