Eurozone leading indicators have turned firmer, with Germany’s IFO business climate index rising to 86.6 in July from 85.7 in June, a move driven by expectations. The improvement aligns with gains in the Eurozone’s July PMI and the ZEW index, pointing to a recovery in economic activity while inflation remains above target.
Prospects for ECB Policy Tightening
Markets have largely priced the likelihood that the ECB resumes tightening in September. Swaps imply 90% odds of a 25 bps rate rise at the 10 September meeting, which may cap the Euro’s scope for further gains against the US dollar.
EUR/USD Technical Levels
In technical terms, EUR/USD faces resistance at 1.1483, the 15 July high, with support at 1.1335, the 24 June low.
