The highly regarded German IFO Business Climate indicator fell from 107.4 to 106.7 points. Expectations were for a rise to 107.8 points.
EUR/USD traded above 1.29 towards the publication and is now dipping under this line. The ongoing crisis in Cyrpus still has the upper hand in driving the euro, so movements are somewhat limited. Update: the dip turned into a small rise.
Also the other components fell: the “current assessment” number dropped from 110.2 to 10.9., short of predictions for 110.4. The “Expectations” figure fell one point from 104.6 to 103.6, short of predictions for a rise to 104.9 points.
Is the Cypriot crisis already reflected in this survey?
Earlier in the week, the ZEW indicator came out just above expectations: a score of 48.5 instead of 47.9 that was expected, well in positive, optimistic territory.
The crisis in Cyprus is the main driver of the euro. With the latest ECB ultimatum, Cyprus could find itself out of the euro-zone. German Chancellor Angela Merkel spoke earlier about Cyprus and urged the country to work quickly.
Support is found at 1.2880 and resistance is at 1.2960. For more, see the EURUSD forecast.Get the 5 most predictable currency pairs