German IFO preview: What to expect of EUR/USD?

A renewed uptick in the EUR/USD pair lost pace once again near 5-DMA, with the now moving back into the familiar range around 1.0875 region. Markets now await fresh impetus on the EUR from the upcoming Ifo surveys.

The German Ifo surveys are lined up for release at 0800GMT in the European session this Thursday.

Ifo current assessment to outperform in October

The headline Ifo Business Climate Index is expected to remain unchanged at 109.5 in Oct,. The Current Assessment sub-index is seen higher at 114.9, compared to 114.7 last, while the Ifo Expectations Index – indicating firms’ projections for the next six months – is expected to remain flat at 104.5 in the reported month.

The Surveys are expected to show no improvement in the business conditions in Germany, which is expected to keep the range-play in the EUR/USD pair intact. On a bearish surprise, the EUR/USD pair could retest seven-month lows of 1.0857, while, the major could regain 1.09 handle if the German data surprises positively.

EUR/USD Technical Levels

Haresh Menghani, Analyst at FXStreet explains, “This 1.0860 level is likely to act as immediate support below which the downslide seems to drag the pair immediately towards 1.0810 support area. A follow through selling pressure below 1.0810-1.0800 strong horizontal support would turn the pair vulnerable to extend its depreciating move in the near-term.”

“Conversely, sustained recovery momentum above 1.0900 handle seems to trigger a bout of short-covering that should boost the pair immediately towards 1.0950-60 important support break-point turned strong resistance.”