- – The Euro is currently recovering from the 0.8350 level against the British Pound.
- – The EUR/GBP is heading higher, but most likely to face sellers near 0.8400-10.
- – The German business sentiment index released by the CESifo Group posted an increase from the last reading of 110.4 to 111.0 in Dec 2016.
German IFO Business Climate Index
The Euro zone saw today the release of the German business sentiment index by the CESifo Group. It is an important indicator of current conditions and business expectations in Germany, and was forecasted to rise from 110.4 to 110.8 in Dec 2016.
However, the result was positive, as there was a rise to 111.0 in Dec 2016. It is the highest level since February 2012. The German IFO Expectations also posted a better than forecast reading of 105.6, up from the last reading of 105.5.
The report stated that “In the manufacturing sector, the index rose. Assessments of both the current business situation and expectations improved. Demand picked up significantly and the order back log grew. More companies plan to ramp up production in the months ahead as a result”.
Overall, the result was positive, and helped the Euro to gain ground. However, the EUR/GBP pair upside won’t be easy, as there is a major hurdle waiting on the upside at 0.8400-10.
EUR/GBP Technical Analysis
The Euro after trading towards the 0.8350 level against the British Pound found support in the form of a bullish trend line on the 4-hours chart. The EUR/GBP pair is currently recovering, and heading towards a major resistance confluence area at 0.8400-10.
The stated resistance is formed via two bearish trend lines on the H4 chart. Moreover, the 38.2% Fibonacci retracement level of the last decline from the 0.8571 high to 0.8331 low is also just above the confluence area.
The last but not least, the 100 simple moving average is also above the highlighted trend lines. So, we can say that there is a major hurdle for the pair at 0.8400. It won’t be easy for the pair to break it. On the downside, the bullish trend line is a short-term support. Overall, we may soon witness a break either lower or higher in EUR/GBP.
Tags: British Pound, EURGBP Technical Analysis, Euro, German IFO Business Climate Index