Germany’s publication of its Ifo Business Climate report was roughly as expected on Thursday. Analysts were expecting a reading of 110.6 making today’s 110.4 figure anti-climactic. Interestingly, the EUR/USD met solid resistance shortly after this report even though such a reading would typically boost the euro.
Today’s thin market conditions ahead of this weekend’s Easter holiday may be interfering with normal currency values. A number of investors have been anticipating a reevaluation at the start of next week as normal volume levels are reintroduced to the market.
Comments from the president of the European Central Bank (ECB), Jean-Claude Trichet, recently hinted at a softening of the central bank’s position in regards to monetary policy. The dovish sentiment has pulled down on the EUR in short-term trading with many traders beginning to shift away from the 17-nation single currency in anticipation of a fall.
The EUR/USD checked its recent rise towards 1.4650 and is now trading downward with a current price near 1.4570. The data out of Germany may have less to do with this movement than the ECB’s softened stance in regards to monetary policy adjustments. Traders may want to anticipate a downturn in this pair at the beginning of next week should the current environment remain unchanged.
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Greg Holden is the Chief Market Analyst at ForexYard. Greg uses his detailed knowledge of fundamental and technical analysis to provide some of the leading market forecasts in the forex world today. A guest lecturer at forex symposiums and Chief Editor of ForexYard's analysis center, Greg brings highly detailed and easy-to-use market analyses to his clientele. He has been published on ForexYard's Trading Blog and affiliate websites. Greg holds degrees in Political Science and Economics from Missouri State University, as well as a Masters degree in Middle Eastern History.
