Key Points
- The Euro moved down recently below the 1.0900 level against the US dollar to trade as low as 1.0859.
- There is a contracting triangle pattern formed at the moment on the hourly chart of EURUSD with resistance near 1.0885.
- Today, the German business sentiment index was released by the CESifo Group.
- The outcome was above the forecast, as there was an increase from the last reading of 109.5 to 110.5 in Oct 2016.
EURUSD Technical Analysis
The Euro traded lower recently and broke a couple of support levels like 1.0920 and 1.0880 against the US Dollar to trade as low as 1.0859. The EURUSD pair then formed a contracting triangle pattern on the hourly chart, and currently attempting to clear the resistance.
If the pair closes above the triangle resistance, and settles above the 21 hourly simple moving average, then a move towards the 38.2% Fib retracement level of the last decline from 1.1040 to 1.0859 at 1.0928 is possible.
One may consider buying with a break, as highlighted in the chart with a tight stop.
German IFO Business Sentiment Index
Today in the Euro Zone, the German business sentiment index, which is closely watched as an early indicator of current conditions and business expectations in Germany was released by the CESifo Group.
The market was aligned for no change from the last reading of 109.5 in Oct 2016. However, the result was above the forecast, as there was an increase to 110.5. The report stated that the “In manufacturing the business climate index rose. This was primarily due to a far more positive outlook for the months ahead. A 10.8 point rise in the expectation indicator was last seen shortly after the financial and economic crisis. Assessments of the current business situation also improved. The business climate index rose in nearly all key branches of manufacturing”.
Overall, the report was positive, and may take the EURUSD pair higher in the short term towards the 1.0920 level.
