IFO Preview: what to expect of EUR/USD

The German IFO is due later in the European morning. Market consensus expects both Business Climate and Current Assessment to improve during the current month, although the Expectations component is seen just a tad lower.

Anyway, the indicator is expected to keep the downtrend since recent tops in June, with confidence amongst investors still not restored and ‘Brexit’ uncertainty lingering.

Regarding FX and barring any big surprise on either direction, EUR/USD is expected to pay little attention to today’s releases, more concerned instead on the USD-dynamics and particularly on the timing of the next Fed’s rate hike. Of note, however, remains the area around 1.1275/80, where the resistance line off 2016 tops keeps capping occasional gains. On the downside, the key 200-day sma today at 1.1157 emerges as the initial target, ahead of the 2014-2016 support line at 1.1147.