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Euro Outlook - EUR/USD Mixed as German Ifo Misses Market Expectations

Euro Outlook - EUR/USD Mixed as German Ifo Misses Market Expectations

Nick Cawley, Senior Strategist
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Euro (EUR/USD) Price, News, and Analysis:

  • German Ifo misses market expectations.
  • EUR/USD remains on either side of 1.2100.
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Sentiment among German business managers drifted marginally lower in April, after a robust reading in March. According to Ifo economist Klaus Wohlrabe, the upward trend is continuing but subdued, while export expectations rose with companies looking to employ more people. Wohlrabe did warn however that ‘the third wave of coronavirus and bottlenecks in production is subduing the economic recovery’.

This week’s economic calendar is packed full of potentially market-moving events and data releases, with a crowded US earnings season, FOMC and BoJ rate meetings, and the first look at US, German, and Eurozone GDP at the end of the week. For all market-moving economic data and events, see the DailyFX Calendar.

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EUR/USD is continuing its one-month V-shaped recovery from its multi-month low just above 1.1700. The 23.6% Fibonacci retracement level at 1.1952 is acting as first-line support with little in the way of a sustained move higher to 1.2243. The pair are flashing an overbought signal (CCI), while the moving averages are currently mixed with both the 20- and 200-day simple moving averages at 1.1957 while the 50-day sma is at 1.1921. The IG client sentiment is also mixed (see below).

EUR/USD Daily Price Chart (June 2020 – April 26, 2021)

IG Retail trader data show 30.60% of traders are net-long with the ratio of traders short to long at 2.27 to 1. We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/USD prices may continue to rise.

Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EUR/USD trading bias.

EUR/USD Bearish
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 39% -19% -2%
Weekly 9% -5% 0%
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What is your view on EUR/USD – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.