When are German IFO surveys and how they could affect EUR/USD?

Dhwani Mehta FXStreet

German IFO Business Climate Overview

The German Ifo surveys for July are lined up for release later today at 8GMT. The headline Ifo Business Climate Index is expected to tick slightly lower to 114.9 in July versus 115.1 seen last month. The Current Assessment sub-index is also expected to decline to 123.8 this month, while the Ifo Expectations Index – indicating firms’ projections for the next six months – is seen at 106.5 in July, as compared to June’s 106.8 reading.

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 German IFO Surveys are expected to show poor results across all indicators, which could keep the EUR/USD pair away from testing 2017 tops of 1.1684, while a positive surprise could help send the rate above 1.1700 levels.

Technically, “With short-term technical indicators still pointing to slightly near-term overbought conditions, and ahead of the key event risk - FOMC decision, the pair's near-term bullish trajectory is more likely to take a pause near the mentioned hurdle, currently near the 1.1700 handle. On the flip side, a decisive pull-back below 1.1625 level, leading to a subsequent drop below the 1.1600 handle, could extend the corrective slide towards an important resistance turned support near mid-1.1500s,” explains FXStreet Analyst, Haresh Menghani.

Key notes

German IFO expectations index likely to decline – Danske Bank

“The decline in the German manufacturing PMI suggests the ifo expectations index will decline and, in our view, there is downside risk to consensus expectations.”

German IFO in focus today - TDS

“We’re in line with consensus in expecting a marginal fall in Germany’s IFO survey for July, with the headline business climate index slipping from 115.1 to 114.9.”

About 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).

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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