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European Open: EUR/USD consolidates ahead of German IFO report

Article By: ,  Market Analyst
March 27, 2023 5:43 AM

Asian Indices:

  • Australia's ASX 200 index rose by 7.1 points (0.1%) and currently trades at 6,962.30
  • Japan's Nikkei 225 index has risen by 116.32 points (0.42%) and currently trades at 27,501.57
  • Hong Kong's Hang Seng index has fallen by -100.65 points (-0.51%) and currently trades at 19,815.03
  • China's A50 Index has fallen by -122.96 points (-0.94%) and currently trades at 12,981.88

 

UK and Europe:

  • UK's FTSE 100 futures are currently up 55 points (0.74%), the cash market is currently estimated to open at 7,460.45
  • Euro STOXX 50 futures are currently up 44 points (1.08%), the cash market is currently estimated to open at 4,174.62
  • Germany's DAX futures are currently up 160 points (1.06%), the cash market is currently estimated to open at 15,117.23

 

US Futures:

  • DJI futures are currently up 147 points (0.45%)
  • S&P 500 futures are currently up 20.25 points (0.51%)
  • Nasdaq 100 futures are currently up 54.25 points (0.42%)

 

 

  • China’s industrial profits slumped -22.9% in the first two months of the year according to government official data, which shows an uneven road for the economy as the government aims to achieve 5% growth this year
  • Japan’s services PPI rose 1.8% y/y in February, up from 1.6% previously
  • USD is currently the weakest major whilst AUD, CHF and NZD are the strongest, although volatility was certainly ion the quiet side, when compared to that seen over the prior couple of weeks
  • Whilst equity market performance was mixed across the APAC region, index futures for European and US markets are between 0.4% to 1% higher which suggests sentiment is improving slightly
  • Fed member Jefferson speaks at 22:00 – “Implementation and Transmission of Monetary Policy”

 

The German IFO report is scheduled for 09:00 GMT+1:

Last week we saw banking concerns weigh on investor sentiment in then German ZEW report, and it would be quite a surprise to not see something similar in today’s IFO report. That said, we’re not sure if Friday’s concerns over Deutsche Bank will show up in the results of this report, and that might actually help the headline number beat expectations. Even so, we suspect the probability of an economic expansion (which is one of the sub-indices) will move lower. And if headline figures move lower far enough, it could weigh on the euro.

 

EUR/USD 30-minute chart:

The euro trades within an established downtrend on the 30-minute chart, although prices have retraced higher after the trend failed to tap 1.0700. Yet as volumes were increasing during the latest leg lower, we suspect another attempt at 1.0700 could be on the cards.

Prices are trading around the weekly and daily picot points, yet below the 50, 100 and 200-bar EMA’s, so bears can either seek to fade into minor rallies below 1.0800 or wait for a break of the 1.0755 low to assume bearish continuation.

 

Economic events up next (Times in GMT+1)

 

 

-- Written by Matt Simpson

Follow Matt on Twitter @cLeverEdge

 

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