Global macro overview for 26/04/2016:
The German Ifo Business Climate sentiment dropped unexpectedly according to yesterday's release. The market participants had expected 107.1 points for this month, but the indicator turned out to be at the level of 106.6. The main reason for the drop was an increasing level of concerns regarding the economic slowdown in the USA and China. In conclusion, even the recent ECB monetary policy update that includes a cut in the deposit rate to negative levels and an increased pace of monthly asset purchases to 80 billion euro did not manage to accelerate the index growth. The negative bias towards the future still dominates ahead of another ECB meeting this Thursday.
Let's now take a look at the EUR/USD technical picture in the 4H time frame. The market made a lower high and lower low, which might signal a change in trend. But currently, the market is reacting to the bullish divergence and the level of 1.1311 might be reached easily. On the higher time frames, the market is still trading inside the congestion zone with no clear trend signals since March 2015.
