German IFO Business Climate Exceeds Expectations – EUR/USD Challenges

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The highly regarded German IFO Business Climate provided a rather rare positive surprise: it rose 0.2 points to 106.6 points. Expectations stood on a drop to 105.3.

EUR/USD is climbing above the 1.3380 line and reaches 1.3392. Significant resistance is at 1.3420.

Surprises were also recorded in the accompanying numbers: IFO Expectations for November surprised by ticking up from 97 to 97.3 points. The current assessment remained unchanged at 116.7 points, better than a drop to 115.5 that was predicted.

This indicator tended to be positive and usually exceeded expectations before the recent round of the crisis, but also here, disappointment were recorded recently. It’s too early to know if this is a change of trend or only a one time rise.

EUR/USD was knocked down yesterday by the failed bond auction in Germany. Some analysts say its a coincidence, but the rise in German yields provide reasons to worry. 10 year German bond yields, seen as a benchmark for all euro-zone yields, are climbing to 2.2% today.

There are reports that Japanese investors are shying away from German bunds and preferring British gilts over them.

If this move fades out, support is found at 1.3320, followed by more important support at 1.3250. Moves might become a bit more fuzzy later on. US markets are closed for Thanksgiving.

For more on EUR/USD, see the euro/dollar forecast.

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About Author

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.

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