- EUR/USD faces extra downside pressure on poor IFO.
- German IFO came in short of expectations in July.
- The ECB could announce extra easing later today.
The European currency came under extra selling pressure and is now pushing EUR/USD to fresh weekly lows near 1.1120.
EUR/USD weaker on IFO, waits for ECB
The pair sunk further after the German IFO surprised markets to the downside in all of its components for the current month. In fact, Business Expectations dropped to 92.2, Current Assessment deteriorated to 99.4 and Business Climate ticked lower to 95.7.
The poor prints from the German docket added to the already beleaguered sentiment surrounding EUR, particularly after PMIs also disappointed expectations yesterday.
Looking ahead, all eyes will be upon the ECB event and the potential announcement of extra accommodative measures seconded by the usual press conference by President M.Draghi.
What to look for around EUR
Rising odds for fresh monetary easing by the ECB today – in the form of interest rate cuts, the resumption of the QE programme and potential changes in the forward guidance – have been hurting the mood in EUR while keeping buyers at bay during past sessions. The deep pullback and the current bearish outlook now carries the potential to force the pair to visit yearly lows in the 1.1100 neighbourhood at some point in the next days.
EUR/USD levels to watch
At the moment, the pair is retreating 0.10% at 1.1128 and faces immediate contention at 1.1116 (monthly low May 30) seconded by 1.1109 (low Apr.26) and finally 1.1106 (2019 low May 23). On the upside, a breakout of 1.1286 (high Jul.11) would target 1.1309 (200-day SMA) en route to 1.1412 (high Jun.25).
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