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German IFO Badly Disappoints – EUR/USD Falls

The headline German IFO Business Climate indicator dropped to 104.4 points. It was expected to slide from 106.7 to 106.4 points. The “Current Assessment” indicator was expected to tick lower from 109.9 to 109.5 but fell to 107.2 points. The Expectations figure dropped from 103.6 to 101.6 instead of sliding only to 103 points.

EUR/USD traded just under the round 1.30 before the release and is now around 1.2960 after already falling to a low of 1.2954. The pair suffered a downfall yesterday following weak German data and lost the 1.30 line. It later recovered.

IFO is Germany’s most important think-tank. The worse business sentiment joins the worse than expected PMIs: manufacturing is now contracting at a faster pace and services fell back from growth to contraction according to Markit.

There is an interesting phenomenon recently: the euro is on the back foot while yields of Spain and Italy are falling. It seems that fear has moved from the debt crisis to German growth  prospects.

Support is found at around 1.2960, followed by 1.2880. 1.30 remains resistance. For more, see the EURUSD forecast.

And here is a live chart of the pair:

[do action=”tradingviews” pair=”EURUSD” interval=”60″/]


Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.