Euro Drops to a 2-Week Low on More Bad News from Germany
THE TAKEAWAY: German IFO business climate survey disappoints at 104.4 for April -> German PMI’s may suggest a continued recession -> EUR/USD touches a 2-week low before reversing
The Euro declined to a new 2-week low against the US Dollar following the release of a worse than expected IFO survey. The business climate survey for April was reported at a three month low of 104.4, disappointing expectations for 106.2 and down from 106.7 in March.
The IFO survey of current assessment was reported at 107.2, down from 109.9 in March; the expectations survey was reported at 101.6, down from 103.6. A survey result above 100.00 indicates a positive outlook.
Just yesterday, the Purchasing Managers’ Indexes for manufacturing and services in Germany both were reported with worse than expected results for April. The Manufacturing PMI declined for the first time in five months. The German economy is the Euro-zone’s biggest and one of the region’s strongest, and signs of a continuing economic decline in Germany, following the 0.6% drop in GDP in Q4, are Euro negative.
Following the German IFO survey release, the Euro dropped nearly forty points and touched 1.2954 against the US Dollar before slowly erasing most of those losses. The reaction may have been short lived because of the losses already suffered by the single currency after yesterday’s German PMI’s. Resistance may now be provided by the key 1.3000 figure, and support could come in by the 200 day moving average at 1.2930.
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EURUSD Daily: April 24, 2013
Chart created by Benjamin Spier using Marketscope 2.0
-- Written by Benjamin Spier, DailyFX Research. Feedback can be sent to firstname.lastname@example.org .