EUR/GBP drops to lows below 0.7800 post-Ifo

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 23, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    The EUR/GBP cross shaved-off gains and fell back below 0.78 handle following the release of worse-than expected Ifo business climate numbers.

    EUR/GBP ran through fresh offers post-data

    Currently, the EUR/GBP pair trades modestly flat at fresh session lows of 0.7789, having failed to resist above 0.78 handle. The EUR/GBP cross met fresh supply after the euro was hit by disappointing Ifo business sentiment surveys from Germany.

    The headline Ifo Business Climate Index dropped to 105.7 in Feb, compared to 107.3 booked in January and below expectations of a 106.8 reading. The index fell to the lowest level since December last year.

    While the downside seems limited as the cable remains weak heading into the quarterly inflation report hearings, with the main focus on the BOE Governor Carney’s speech in wake of the recent Brexit debate. Meanwhile, the upcoming US macro releases will also have some bearing on the cross.

    EUR/GBP Technical Levels

    To the upside, the next resistance is located at 0.7847/49 (Feb 17 High/ daily R1), above which it could extend gains to 0.7900/01 (Feb 11 High). To the downside immediate support might be located at 0.7777/76 (1h 200-SMA/ 5-DMA) below that at 0.7731/28 (20-DMA/ daily S1).
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