Euro – German Ifo Business Climate Index
Today, at 9 a.m., the German Ifo Institute for Economic Research will release its German Business Climate Index, which measures the level of a composite index by surveying 7,000 manufacturers, builders, wholesalers, and retailers in the country.
Binary options traders consider the Ifo business climate index to be an important leading indicator of the overall condition of the Germany economy because of the large sample size of the survey. Moreover, businesses tend to react first to the changing economic climate and business conditions. Hence, an index based on the survey of sentiments from major businesses can always indicate future economic conditions in the country.
Since the German economy makes up a large portion of the overall Eurozone economy, the German Ifo Business Climate Index figure can have a huge impact on the valuation of the Euro against other major currencies.
In January, the German Ifo Business Climate Index came out at 106.7 and the forecast for February is set at a slightly higher reading, at 107.4.
United States – Existing Home Sales
Later in the afternoon, at GMT 3 a.m., the US National Association of Realtors will release the existing home sales figure, which measures the changes in the annualized number of residential builders that were sold during the last month. However, this figure excludes any new construction of residential buildings in the country.
A sale of an existing home usually causes a wider ripple effect in the local economy as there is a lot of economic activity associated with the sale of a home. A new mortgage, home renovation work and other purchases by the new homeowners affect the local economy in a positive way. Hence, binary options traders consider the existing home sales figure to be an important leading indicator of the overall US economy.
Last month, the US existing home sales figure came out at 5.04 million and the forecast for this month is currently set at 5.03 million. While the forecast is very close to last month’s figure, anything below 5 million would make the market anxiously regarding the future course of the US economy.
Trade Recommendation for the EUR/USD
Since May 8, 2014, the EUR/USD has been on a steady down trend, which further accelerated in December 2014 when the pair reached a record low, at 1.1097. Since then the EUR/USD has retraced up and broke the intermediate downward sloping trend line. Regardless of the bounce, the EUR/USD could not break above the resistance around 1.1500 and currently trading within a narrow range, 1.1278 and 1.1500.
For the last several weeks, binary options traders are being concerned regarding the state of the US economy due to lower than expected Q4’14 real GDP growth and increasing unemployment claims. If the annualized existing home sales figure dips below 5 million, it will add further bullish momentum to the EUR/USD price. In that situation, if the EUR/USD price breaks above the resistance around 1.1500, it is recommended that binary options traders consider placing CALL orders with this pair.
[featured feattitle=’Recommended Broker: HighLow.net’ site=’HighLow’ ] HighLow.net is a popular binary options broker regulated by ASIC. [/featured]About our Forex Analyst: Asif Imtiaz
- GBP/AUD Appears Bullish Amid Impressive Growth of Net Lending to Individuals in the UK - January 4, 2022
- AUD/CHF Likely to Break Above Key Resistance if Swiss Trade Balance Declines - December 20, 2021
- AUD/JPY Downtrend Line Likely to Hold the Bulls As Declining Japanese Household Spending Slowed Down - December 7, 2021
