November 26, GKFX – The German IFO survey for November is slated for release later today at 09:00 GMT. The headline IFO Business Climate Index is expected to drop to 102.3.
The Current Assessment sub-index is also seen weaker at 105.3 this month, while the IFO Expectations Index – indicating firms’ projections for the next six months – is likely to fall to 99.2 in the reported month versus 99.8 last.
Deviation impact on EURUSD
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 German IFO Survey Impacts EURUSD
The spot could stall its upside moment and drop back to the 1.1300 level on a bigger-than-expected drop in the IFO indicators while the EURUSD pair could head further towards the 1.1400 resistance zone on a positive surprise.
However, the reaction to the data is likely to be limited, as the main driver for today could be the ECB President Draghi’s speech and Brexit deal-related developments. According to Karen Jones, Analyst at Commerzbank,
“The market needs to overcome the current November high at 1.1500 to alleviate immediate downside pressure and allows for gains to 1.1581/1.1622 (2018 downtrend and 16th October high).
Support at 1.1300 guards 1.1216 the recent low. While the 1.1216 current November low holds the downside scope for recovery remains longer term, but waning downside risk has increased!”
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).
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