EUR/USD challenges 1.1900 post-IFO

The selling bias around the European currency has resumed, dragging EUR/USD to test the 1.1900 neighbourhood, near session lows.

EUR/USD offered on downbeat IFO

Spot has picked up extra downside pressure after the German IFO disappointed market expectations for the current month.

In fact, business expectations came in at 107.4 (vs. 107.9 expected), current assessment at 123.6 (vs. 124.8 forecasted) and business climate at 115.2 (vs. 116.0 estimated).

The lower-than-expected results add to the already bearish note around the pair today, which follows another win by Chancellor A.Merkel at yesterday’s elections although uncertainty stays on the rise due to the unexpected results from the far-right vote (12.6%).

Further news in the euro area noted the speculative community scaling back its EUR net longs to the lowest level since late June during the week ended on September 19, according to the latest CFTC report.

Data wise in the euro bloc, the German IFO survey is due seconded by a slew of ECB-speakers (Draghi, Coeure, Constancio, Mersch). Across the pond, the Chicago Fed index is only expected, while NY Fed W.Dudley (permanent voter, dovish) and Chicago Fed C.Evans (voter, dovish) are also due to speak.

EUR/USD levels to watch

At the moment, the pair is losing 0.42% at 1.1907 and a breakdown of 1.1898 (low Sep.25) would target 1.1862 (low Sep.20) en route to 1.1837 (low Sep.14). On the upside, the initial hurdle emerges at 1.2006 (high Sep.22) followed by 1.2033 (high Sep.20) and finally 1.2069 (high Aug.29).