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Disappointing data from Germany’s IFO institute: the headline business climate figure dropped to 108, “current assessment” dips to 112.9 and the expectations component fell below expectations at 103.4 points. These are significant misses.  The German IFO business climate was expected to tick down from 109.7 to 109.4 points in July. The “Current Assessment” component was predicted to slide from 114.8 to 114.5 and the “Expectations” figure was estimated to follow the same path and drop from 104.8 to 104.5 points. Geo-political worries are weighing on business climate.

EUR/USD was stable in the 1.3450 to 1.35 range, trading around 1.3465 towards the    publication. The euro is now falling towards 1.3450. Update: the pair slips below 1.3450.

At the same time,  Eurostat released more data: M3 Money Supply was expected to edge up from 1% to 1.1% year over year. These are low levels. Private loans were also predicted to advance: from a contraction of 2% to 1.8% now y/y. These have actually surprised to the upside: M3 money supply is 1.5% and year over year loans are down only 1%. This could be music to the ECB’s ears.

The euro  was on the back foot throughout the week,  grinding lower with no respite. However, after yet another dip yesterday, the pair managed to finally bounce back in a hammer pattern.

The next important event for the pair is the release of durable goods orders in the US due later on in the day.

For more, see the EURUSD forecast.

Here is how it looks on the chart:

EURUSD down July 25 2014 on weak IFO business climate 30 minute forex chart