- Euro nosedived against most major currencies lately, including the British Pound.
- The ECB’s announcement of more QE in December 2015 did not go down well with the Euro buyers.
- German IFO business sentiment index was released by the CESifo Group today, which posted a decline from 108.5 to 108.2 in September 2015.
- German IFO Expectations increased from 103.3 to 103.8 in September 2015.
The Euro moved sharply lower against the US Dollar and the British Pound recently, as the ECB announcement of more QE in December 2015 ignited a selling wave. The EURGBP pair traded as low as 0.7168 where there was a bullish reaction.
There was a triangle pattern formed on the hourly chart, which was broken recently to clear the way for more downsides in the near term.
If the EURGBP pair attempts to correct higher from the current levels, then we can witness selling interest near the 50 hourly simple moving average aligned with the broken triangle trend line.
German IFO Business Climate Index
Today, there was a monster release lined up in Germany, as the IFO business sentiment index, which is a main indicator (closely watched) of current conditions and business expectations was reported by the CESifo Group.
The market was expecting a decline in the IFO business climate index from 108.5 to 107.8 in September 2015. However, the outcome was a bit better, as the index came in at 108.2. However, we cannot decline the fact that there was a fall in the index from the last reading.
The report stated that “Optimism with a view to future business developments nevertheless continued to grow. The German economy is proving remarkably resilient in view of this autumn’s multiple challenges.”
Overall, there was a bearish pressure noted on the Euro, and there is an increase of risk of more declines in EURUSD and EURGBP.