German Ifo Business Climate is a monthly composite index of about 7,000 businesses, which are surveyed about current business conditions and their expectations concerning economic performance over the next six months. A reading which is higher than the estimate is bullish for the euro.
Here are all the details, and 5 possible outcomes for EUR/USD.
Published on Thursday at 9:00 GMT.
Indicator Background
German Ifo Business Climate, a leading economic indicator, is as an excellent barometer of current and future economic conditions. As a market-mover, analysts pay close attention to the monthly releases of the index.
The indicator remains at strong levels, and improved to 109.0 points in November, beating the estimate of 108.3 points. The upward swing is expected to continue, with an estimate of 109.2 points.
Sentiments and levels
The euro has bounced back nicely since the ECB earlier this month, which saw no significant easing measures. Still, the Eurozone is a mess, with weak growth and no inflation to speak of. In the US, a historic rate hike will be great news for the greenback. So, the overall sentiment is bearish on EUR/USD towards this release.
Technical levels, from top to bottom: 1.1113, 1.1050, 1.0910, 1.0760, 1.0615 and 1.0550.
5 Scenarios
- Within expectations: 105.0 to 112.0: In such a case, the euro is likely to rise within range, with a small chance of breaking higher.
- Above expectations: 112.1 to 116.0: An unexpected higher reading can send EUR/USD above one resistance line.
- Well above expectations: Above 116.0: The chances of such a scenario are low. A second resistance line might be broken on such an outcome.
- Below expectations: 102.0 to 104.9: A lower reading than forecast could push the pair below one support level.
- Well below expectations: Under 102.0: In this scenario, EUR/USD could take a hit and drop below a second support line.
For more on the euro, see the EUR/USD forecast.