When is the German IFO survey and how they could affect EUR/USD?
|The German IFO Business Survey Overview
The German IFO survey for December is slated for release later today at 0900 GMT. The headline IFO Business Climate Index is expected to drop to 101.7.
The Current Assessment sub-index is also seen weaker at 104.9 this month, while the IFO Expectations Index – indicating firms’ projections for the next six months – is likely to fall to 98.2 in the reported month versus 98.7 last.
Deviation impact on EUR/USD
Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 3 and 40 pips in deviations up to 2.4 to -3.2, although in some cases, if notable enough, a deviation can fuel movements of up to 60 pips.
How could affect EUR/USD?
The spot could stall its upside momentum and drop back to the 1.1300 level on a bigger-than-expected drop in the IFO indicators while the EUR/USD pair could head further towards the 1.14 handle on a positive surprise.
According to Karen Jones, Analyst at Commerzbank, “EUR/USD is bouncing from the November low at 1.1267. Rallies will find initial resistance at the 55-day ma at 1.1402 and last week’s high at 1.1442 and this guards the 2018 downtrend at 1.1503. Failure at 1.1267 will trigger losses to the 1.1216 recent low and the 61.8% Fibonacci retracement of the 2017-18 advance at 1.1186. Failure there would put the late May and June 2017 lows at 1.1119/10 on the cards.”
Key Notes
Market themes of the Day: German Ifo business climate set to decelerate in December
EUR/USD Forecast: Moves back to familiar trading range ahead of FOMC
Germany: Focus on IFO data today – Danske Bank
About the German IFO Business Climate
This German business sentiment index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. The Institute surveys more than 7,000 enterprises on their assessment of the business situation and their short-term planning. The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish).
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