Euro Nosedives As Sellers Gain Momentum
The Euro (EUR) inched lower against the US Dollar (USD) on Monday, decreasing the price of EUR/USD to less than 1.0900 ahead of the IFO Business Climate report which is considered a key gauge for business conditions. The technical bias remains bullish because of a higher high in the recent upside wave.
Technical Analysis
As of this writing, the pair is being traded around 1.0857. A hurdle may be noted near 1.0900, the psychological number as well as high of last major upside move ahead of 1.0948, a major trendline resistance on daily timeframe. A break and hourly closing above the 1.0948 resistance shall trigger renewed buying interest, validating a move towards the 1.1070 resistance zone.
On the downside, a support may be seen near 1.0808, the 38.2% fib level support area as demonstrated in the given above hourly chart ahead of 1.0777, the short term horizontal support as well as 50% fib level. A break and hourly closing below the 1.0777 support shall incite renewed selling pressure, validating a move towards the 1.0588 support which is the low of last major downside move on hourly timeframe. The technical bias shall remain bullish as long as the 1.0588 support zone is intact.
How EUR/USD Reacted on Past IFO Business Climate Releases?
The EUR/USD rose by more than 20 pips after the release of IFO Business Climate data last month on 27th March 2017. The business climate registered 112.3 reading in March as compared to the forecast of 111.0, the report said last month.
The pair however fell by more than 50 pips after the release of February’s business climate report because the actual figure was 109.8 vs the forecast of 111.3 points.
Trade Idea
Considering the overall technical and fundamental outlook, selling the pair around current levels can be a good strategy in short to medium term.
What Assets to Trade
In addition to EURUSD, trading EURGBP, EURCAD and EURAUD may be a good move as the aforementioned pairs are highly reactive to the IFO Business climate report.