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

The German IFO Business Surveys Overview

The German IFO surveys for August are lined up for release later today at 0800 GMT. The headline IFO Business Climate Index is expected to advance to 101.9 in August. The Current Assessment sub-index is also seen higher at 105.4 this month, while the IFO Expectations Index – indicating firms’ projections for the next six months – is likely to rise to 98.5 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 retreat and bounce-back towards the 1.1650 level on a better-than expected improvement in the IFO surveys while the EUR/USD pair could accelerate declines to test the 1.1580 support zone on disappointing readings.

According to Karen Jones, Analyst at Commerzbank, “EUR/USD spent much of last week consolidating just below the 55 day ma, currently at 1.1615, but has now risen above it. The cross will need to drop sub 1.1508 to alleviate immediate upside pressure. The rise above the five month resistance line and the 55 day ma at 1.1575/1.1615 is short-term bullish and eyes the 1.1700 area. Only a drop and daily chart close below the 1.1300/1.1296 November 2016 and mid-June 2017 highs would make us assume the resumption of the down move. In this case the 61.8% Fibonacci retracement of the 2017-18 rise at 1.1187 would be targeted. A drop below the 1.1508 June low would retarget the current August low at 1.1301.”

Key Notes

EUR/USD on a steady retreat towards 1.1600 ahead of German IFO

Markets: Key economic releases and events for the week ahead - Rabobank

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).