The German IFO Business Survey Overview
The German IFO survey for October is slated for release later today at 0800 GMT. The headline IFO Business Climate Index is expected to drop slightly to 103.0 in October.
The Current Assessment sub-index is also seen weaker at 106.0 this month, while the IFO Expectations Index – indicating firms’ projections for the next six months – is likely to fall to 100.3 in the reported month versus 101.0 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 corrective upside and drop back below the 1.1800 level on a bigger-than-expected drop in the IFO indicators while the EUR/USD relief rally could head further towards the 1.1480 resistance zone on a positive surprise.
However, the reaction to the data is likely to be limited, as the main event risk for today remains the ECB monetary policy decision and President Draghi’s speech due later in the mid-European session.
According to Karen Jones, Analyst at Commerzbank, “EUR/USD remains on the defensive following its recent failure at the 20-day ma at 1.1513 and has eroded support at 1.1411/15, the 78.6% retracement and 2017-2018 support line. At this point, we will assume that there is scope for a retest of the 1.1319 200 week ma and 1.1301 recent low. This is expected to hold the downside. There is not a good entry point with a stop and we will stand aside today.”
Key Notes
Market themes of the Day: German Ifo index and ECB headline
EUR/USD Forecast: Risks falling to YTD lows, all eyes on ECB today
EUR/USD: Sell the rallies to 1.1480 ahead of ECB?
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).
Share
