When are the German IFO surveys and how they could affect EUR/USD?

The German IFO Business Surveys Overview

The German IFO surveys for September are lined up for release later today at 0800 GMT. The headline IFO Business Climate Index is expected to drop to 103.2 in September. The Current Assessment sub-index is also seen weaker at 106.1 this month, while the IFO Expectations Index – indicating firms’ projections for the next six months – is likely to fall to 100.2 in the reported month.

Deviation impact on EUR/USD

Readers can find FX Street's proprietary deviation impact map of the event below. As observed the reaction is likely to remain confined between 3 and 40 pips in deviations up to 2.4 to -3.2, although in some cases, if notable enough, a deviation can fuel movements of up to 60 pips.

 How could affect EUR/USD?

The spot could stall its corrective slide and bounce-back towards the 1.1800 level on a positive surprise in the IFO indicators while the EUR/USD pair could accelerate its retreat and test 1.1698 (10-DMA) on disappointing readings.

However, the reaction to the data is likely to be limited, as the main event risk for today remains the ECB President Draghi’s speech due at 1300 GMT.

According to Karen Jones, Analyst at Commerzbank, “Last week EUR/USD briefly shot up to 1.1803 before dipping back below its July high at 1.1790. The 1.1790/1.1803 resistance area is to cap today but over the course of the week still looks exposed. A close above 1.1803 will trigger a move to the 1.1853 mid-June high and the 1.1904 55 week ma. Directly above here lies the 200 day ma at 1.1947 and we would allow for some profit taking there. We continue to view the August low at 1.1301 as a significant turn for the market. Minor support comes in at the 1.1750/34 late July and August highs. The market stays bid above the 1.1637 near-term support line. The cross will need to drop sub 1.1508 to alleviate immediate upside pressure. A drop below the 1.1508 June low would retarget the August low at 1.1301.”

Key Notes

Germany: Ifo Business Climate Survey to decrease to 101.7 in September – Nomura

EUR/USD Forecast: Challenging uptrend support amid fresh trade tensions

Market themes of the Day: Fresh concerns about trade and Brexit ahead of Draghi's speech

About the German IFO Business Climate

This German business sentiment index released by the CESifo Group is closely watched as an early indicator of current conditions and business expectations in Germany. The Institute surveys more than 7,000 enterprises on their assessment of the business situation and their short-term planning. The positive economic growth anticipates bullish movements for the EUR, while a low reading is seen as negative (or bearish).