Currency market. EUROPEAN session review: improving Ifo good for whole Euro Zone

Data released: 

07:00 GMT Germany Gross Domestic Product s.a (QoQ) (Q3) 0.3% 0.3% 0.7% 

07:00 GMT Germany Gross Domestic Product n.s.a (YoY) (Q3) 1.1% _ 0.9% 

09:00 GMT Germany IFO - Current Assessment (Nov) 112.2 111.6 111.3 

09:00 GMT Germany IFO - Business Climate (Nov) 109.3 107.7 107.4 

09:00 GMT Germany IFO - Expectations (Nov) 106.3 104.0 103.7 

Investors welcomed upbeat German business-confidence data, showing improvements in all of its components, beating both previous estimates and October’s prints. So, current Assessment rose to 112.2, while Business Climate and Expectations, up to 109.3 and 106.3, respectively. 

Separate report showed on an annual basis German GDP w.d.a. increased 1.1% in Q3, following a 0.5% rise registered the previous quarter. This result is in line with forecasts. 

On a quarterly basis Q3 GDP s.a. edged up 0.3%, following 0.7% growth in Q2, as expected. 

The main area of concern was the performance of the French economy which may contract again for the second consecutive quarter in Q4. In contrast, the German economy continues to lead the economic recovery. 

EURO 

The release of the disappointing euro-zone PMI surveys for November continued to highlight that the economic recovery remains weak and fragile which may require further monetary easing next year. 

The euro-zone composite PMI survey unexpectedly declined by 0.4 point to 51.5 in November, which Markit noted was consistent with real GDP expanding by 0.2% in Q4. 

EUR/USD stays around $1.3520 with initial resistance comes at $1.3580 (Nov 19 highs). Above $1.3600 resistance placed at $1.3620 (61.8% Fibo of the $1.3830 - $1.3300 decline).Now support comes at $1.3400/90 (Nov 13 lows) and $1.3300/90 (Nov 7 lows). 

POUND 

The pound strengthened to a four-week high against the dollar as economists said reports next week will confirm Britain’s recovery is gathering pace, boosting demand for the U.K. currency. 

Gross domestic product rose 0.8% in the third quarter after growing 0.7% in the previous three months, a separate survey showed before the Office for National Statistics releases the report on Nov. 27. 

GBP/USD trades a bit lower $1.6200. Initial support is around $1.6070 (Asian lows) and $1.5900/90 (Nov 14 lows) with a break under widens losses to $1.5850 (Nov 12 lows). 

YEN 

The overnight developments helped push the dollar higher against a number of regional currencies. The greenback added a total of 1.1% against the yen on Thursday to its highest level since early July and extended its run early Friday. 

BOJ monthly report says overall economic view unchanged. 

USD/JPY trades near Y101.10. Above resistance comes at Y101.50 (Jul 7 high). Initial support comes at Y100, then - at recent lows on Y99.40, below - near Y99.00 (Oct 17 highs). 

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