German business sentiment fell unexpectedly this month as companies downgraded their outlooks, a private survey revealed on Thursday. The Munich-based Ifo Institute reported its Business Climate Index, which is based on approximately 7,000 monthly survey responses in the construction, manufacturing, retail and wholesale sectors, decreased to 109.8 from 111.0 points seen December, while market analysts anticipated a slight acceleration to 111.3 in the reported period. Furthermore, there was a slight confidence fall in wholesale, while retailing sentiment dropped to a five month-low. In the meantime, the Current Assessment Index advanced to 116.9 in January from 116.7 points registered in the prior month, matching analysts' expectations. However, the Business Expectations Index, which tracks sentiment in the next six months, declined to 103.2 during the reported period from 105.5 in December, hitting the lowest level in five months.
The latest Ifo report suggests that companies are positively confident in near-term growth. In addition, manufacturers intend to increase prices. According to forecasts, German industries are likely to gain support from the firming global economy and ECB‘s accommodative monetary policy. Exports are set to appreciate 2.8% this year on the stronger Euro.
Upcoming events: US GDP and Core Durable Goods Orders
At 13:30 GMT there will be a package of fundamental data released in the US. The data is surely set to affect the markets, as it is the once in three months released US GDP, combined with US Core Durable Goods Orders. The Dukascopy research team will be covering the data release on our live webinar. Traders are welcomed to tune in. That will be possible by clicking on the notification that will pop up in the Dukascopy trading platform before the coverage of the data publication.
EUR/USD reaches 1.0666 mark
Daily Chart: As it was forecasted, the common European currency dropped to the weekly PP, which is located at 1.0666, against the US Dollar. In addition, during the move the pair touched the 1.0658 mark. The currency exchange rate is still set to move even lower before a rebound occurs, as the next support level is near the 1.0610 mark. That support cluster is made up of three levels of significance and two trend lines, which makes a rebound an almost clear certainty. However, that might not occur during Friday's trading session, as daily aggregate technical indicators for the pair forecast a surge by the end of the day.SWFX traders largely bearish
SWFX traders remain bearish, as 56% of open positions are short on Friday. In the meantime, 60% of trader set up orders are set up to sell the Euro.
Spreads (avg,pip) / Trading volume / Volatility
Average forecast says EUR/USD will trade around 1.06 in April
Traders, who were questioned on their longer-term views on EUR/USD between December 27 and January 27 expect, on average, the currency pair to trade around 1.06 by the middle of April. In general, 54% (+1%) of participants believe the exchange rate will be generally below 1.06 in ninety days, and 25% see it below 1.02. In the meantime, 15% (-1%) of those surveyed reckon the pair will trade above 1.12 in three months.