EUR/USD Remains Tentative Prior to US Consumer Confidence Data

Eurozone – German Ifo Business Climate Index

Today, at GMT 9:00 a.m., the Ifo Institute for Economic Research will publish this month’s German Business Climate index. The Ifo Business Climate figure measures the level of a composite index, which is created by surveying around 7,000 businesses in Germany by asking them to rate the comparative business conditions of now and in six months.

Since the survey has a large sample size compared to similar studies, binary options investors consider the Ifo Business Climate to be a strong leading indicator of the overall economic optimism in the country.

Last month, the German Ifo Business Climate index came out at 108.7, and this month, the forecast is set slightly lower, at 107.7.

United States – CB Consumer Confidence

Tomorrow, at 3:00 p.m., the Conference Board Inc. will publish its Consumer Confidence index that measures the level of a composite index created from data based on a regular monthly household survey.

A higher consumer confidence usually indicates future consumer spending, which can significantly affect the overall economic conditions. Hence, binary options traders consider this kind of survey based index to be a leading indicator.

Last month, the CB Consumer Confidence index came out at 98.0. This month, the forecast is that the index reading will come out slightly lower, at 95.6.

Trade Recommendation for the EUR/USD

EURUSDDaily

Since the formation of a large bearish pin bar on May 3, 2016, the EUR/USD has remained in a strong downtrend, which pushed the price by around 700 pips over the last three months and helped form a well-respected downtrend line in the process.

Last week, the EUR/USD started a retracement, but the immediate resistance around the 1.1150 level proved to be too much for the bulls and soon the price resumed the downtrend. Last Friday, the EUR/USD price came near support around the 1.0965 level, penetrated it but failed to close below support.

The bears appear to be tentative regarding the direction at the moment as the CB consumer confidence index reading in the United States is expected to go down from 98.0 to 95.6. However, if the data comes out better than the forecast and the EUR/USD price closes below the 1.0965 level, it would certainly confirm the continuation of the downtrend.

Under the circumstances, it would be recommended that binary options traders consider placing a PUT order for the EUR/USD with their binary options brokers as soon as the price and closes below the 1.0965 level on the daily chart.

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