As we close out another week today, all eyes are on the EU Economic Summit, currently in its second day. The euro has gone up marginally against its main currency rivals following news that the EU may implement a permanent stability mechanism in order to prevent any further euro zone debt crises.
Whether or not the euro can maintain its overnight gains will largely depend on today’s sole significant economic indicator, the German Ifo Business Climate.
9:00 GMT: EUR German Ifo Business Climate
This indicator is considered to be one of the leading signals of economic health in the euro zone. The Ifo Business Climate is a survey of various businesses in Germany. As businesses are typically the first to react to any economic changes, traders will want to pay careful attention to today’s figure. Furthermore, German economic indicators tend to create heavy volatility among euro pairs, largely because Germany is the biggest euro zone economy.
Last month, the survey came in well above analyst predictions, leading to a healthy boost for the euro. Should a similar occurrence happen today, traders may be able to capitalize on an impending bullish session for the 16-nation single currency. Currently, forecasts are calling for a figure of around 109.2. Anything at or above this level may lead to significant gains for the euro to close out the week.
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Dan Eduard is a Market Strategist with ForexYard. His addition to the ForexYard team has brought a unique new perspective to our clients. Dan's ability to compare and contrast trans-national issues with events in the market is uncanny and many clients so far have used his advice to make leaps and bounds in their trading strategies. He has been published on the ForexYard Trading Blog and affiliate websites. He carries a BA in Political Science and an MA in History.
