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IFO halts post-Draghi EUR/USD decline – KBC

FXStreet (Barcelona) - The KBC Research Team notes that the IFO business climate surprised on the upside of expectations and the window of opportunity for a real test of the EUR/USD 1.2358 correction low was closed.

Key Quotes

“Yesterday, investors adapted positions further in the wake of Draghi’s comments and the policy easing of the PBOC last Friday. However, the German IFO survey didn’t support the post-Draghi decline of the euro.”

“The IFO business climate surprised on the upside of expectations. The reaction was moderate, but the window of opportunity for a real test of the EUR/USD 1.2358 correction low was closed, at least temporary.”

“Ongoing constructive equity sentiment supported USD/JPY again. The pair regained the 118 big figure.”

“Today, the focus will turn more to the US. The US data might be USD constructive. USD/JPY might be more vulnerable to such a move compared to USD/EUR.”

“The topside in EUR/USD looks better protected, but we are not convinced of a sharp break lower in EUR/USD right now. Any further decline from here probably will go gradually”

France Business Climate registered at 99 above expectations (97) in November

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