German Ifo preview: What to expect of EUR/USD?
EUR/USD keeps the range-trade intact as we head towards the German Ifo survey release, with the bulls striving hard to take-out stiff resistance placed near 1.1160 region. The major ignored the persistent risk-on moods in the markets as well as upbeat German Gfk consumer climate data, as a corrective slide in the greenback continues to underpin EUR/USD.
Focus now shifts towards the German Ifo business climate survey due for release later today at 08.00GMT.
Ifo to show a rebound in May
The Ifo survey for business climate is seen higher at 106.9 points in May, a marginal 0.3 improvement. The current assessment is seen inching up to 113.3, while the expectations expect an improvement to 100.8 in May from 100.4 booked previously.
The Surveys are expected to show a rebound in the business sentiment in the Eurozone’s most powerful economy, after the business confidence unexpectedly weakened last month, underscoring concerns sign that Germany is losing some of its pace.
However, it may not be surprising, if today’s Ifo survey shows further deterioration in May, especially after the ZEW economic sentiment for May unexpectedly dropped from 11.2 to 6.4, while the current situation gauge jumped from 44.7 to 53.1.
EUR/USD Technical Levels
Haresh Menghani, Analyst at FXStreet explains, “The pair is sustaining its weakness below 100-day SMA and hence, remains vulnerable to extend its near-term weakness towards testing a medium-term ascending trend-channel support near 1.1100 handle. However, on H4 the pair seems to be in the process of forming a bullish reversal falling wedge chart-pattern with the lower descending trend-line support coinciding at 1.1100 handle. Hence, 1.1100 level is likely to act as a deciding point in determining the pair’s near-term direction.”
“A sustained weakness below this 1.1100 handle would negate the bullish rising wedge formation and signal a fresh break-down for the pair, thus opening room for extension of the pair’s near-term downward trajectory.”
