German Ifo Business Climate is a monthly composite index of about 7,000 businesses, which are surveyed about current business conditions and their expectations concerning economic performance over the next six months. A reading which is higher than the estimate is bullish for the euro.

Here are all the details, and 5 possible outcomes for EUR/USD.

Published on Thursday at 9:00 GMT.

Indicator Background

German Ifo Business Climate, a leading economic indicator, is as an excellent barometer of current and future economic conditions. As a market-mover, analysts pay close attention to the monthly releases of the index.

The indicator continues to improve and posted a reading of 110.5 points in October, above the estimate of 109.6 points. Little change is expected in November, with an estimate of 110.6 points.

Sentiments and levels

The euro continues to hug the 1.06 line, so movement could remain limited ahead of the Thanksgiving holiday in the US. The pair could resume the downtrend afterward, as monetary policy divergence continues to favor the US dollar. There is growing talk about EUR/USD parity. So, the overall sentiment is neutral on EUR/USD towards this release.

Technical levels, from top to bottom: 1.0850, 1.0780, 1.0710, 1.0520 and 1.0460

5 Scenarios

1. Within expectations: 107.0 to 113.0: In such a case, the euro is likely to rise within range, with a small chance of breaking higher.
2. Above expectations: 113.1 to 117.0: An unexpected higher reading can send EUR/USD above one resistance line.
3. Well above expectations: Above 117.0: The chances of such a scenario are low. A second resistance line might be broken on such an outcome.
4. Below expectations: 103.0 to 106.9: A lower reading than forecast could push the pair below one support level.
5. Well below expectations: Under 103.0: In this scenario, EUR/USD could take a hit and drop below a second support line.

For more on the euro, see the EUR/USD forecast.