Global macro overview for 20/12/2016:
The Business Climate Index data was published in Germany yesterday.The Ifo Institute said its Business Climate Index based on approximately 7,000 monthly survey responses in the manufacturing, construction, wholesale and retail sectors advanced to 111.0 points from 110.4 points seen in November. Market participants were expecting an increase to 110.7 points from 110.4 a month ago. Another Ifo sub-Index, the Current Assessment Index, increased to 116.6 points in December, following the preceding month's 115.6 points and beating the analysts' expectations of 115.9 points.The last Ifo sub-index, the Business Expectations Index, which measures how local businesses foresee the next six months, increased to 105.6 in the same month from November's 105.5, in line with market expectations. In conclusion, the overall German business sentiment rose to the highest level since February 2014. It means Donald Trump's victory in the presidential election is not seen as a threat to the German economy as anticipated.
Let's now take a look at the EUR/USD technical picture on the 4H time frame. Slow and steady pre-Christmas holiday trading conditions have trapped the price in the horizontal range between the levels of 1.0481 and 1.0363. On the bigger time frames, the bias is still bearish with a possibility of the parity test (1.0000) before any meaningful corrective rally.
