Global macro overview for 26/08/2016:
The fresh IFO Business Climate data from Germany had been released yesterday morning and investors can clearly see that the sentiment among German businesses was wakening the last month. Market participants expected the IFO index to print the figure at the level of 108.5, a 0.2 points increase from last month release, but the actual print was at the level of 106.2. That was the lowest reading since February and the biggest monthly drop since Spring 2012 and the economists say the reason behind the drop is quite simple: the German economy begins to show signs of post-Brexit pressure. Moreover, the rest of the IFO sub-index also weakened amid the general expectations of a slight increase. In conclusion, the German business sentiment is definitely not good and this might be only the beginning of the post-Brexit situation.
Let's now take a look at the EUR/USD technical picture in the 4H time frame. The dashed blue trend line still provides the support for the bullish camp, but the volatility is now rather limited as market participants expect the Jackson Hole speech from FED Chairperson Jannet Yellen. The main support is seen at the level of 1.1233 and the next important resistance is seen at the level of 1.1363.
