- Euro faced a lot of selling pressure lately not only against the US Dollar, but also against the Australian Dollar.
- EURAUD is following a descending channel pattern on the hourly chart, and likely to trade lower further.
- Today, the German business sentiment index released by the CESifo Group posted a decline from 109 to 108.7 for December 2015.
- Moreover, the German IFO Current Assessment also decreased from 113.4 to 112.8.
As mentioned the EURAUD pair is following a declining path, as there is a descending channel pattern formed on the hourly chart. The pair is now below the 100, 200 and 50 simple moving average, which is a bearish sign.
Currently, the pair testing the channel support area, aligned with the 76.4% Fib level of the last move from the 1.4954 low to 1.5342 high.
A break below the channel support area may call for more losses in the near term. On the upside, the 200 MA could act as a hurdle.
German IFO Business Climate Index
Today, the Euro Zone saw a major release, as the German business sentiment index was reported by the CESifo Group. It is one of the closely watched indicators of current conditions and business expectations in Germany. The market was expecting no change in the index from 109.0 in December 2015, but the outcome missed the mark. The German business sentiment index declined from 109.0 from 108.7.
The report stated that “index values for the business climate, situation and expectations are around three points above the respective levels seen in December 2014. The economic situation could hardly be better in the run-up to Christmas”.
Overall, the Euro was under pressure, as there was no relief for buyers. A break below the channel support area may ignite a move towards the last swing low of 1.4950.