EUR/USD moves of late have been dictated by Fed expectations, US data and EUR/JPY flows. The attention will shift to the EZ later today with the release of the German IFO at 08:00 GMT. Recent data out of Europe has been positive and comments from ECB and EZ financial minister officials have been upbeat.
If the German IFO supports that view the EUR should continue to track higher against the USD and EUR. The median expectation is for 106.5 slightly down from the 107.0 reading in February. A weaker number could see the EUR/JPY ease, but traders feel that a dip in the cross should be viewed as a buying opportunity with heavy EUR/JPY buying flows expected tomorrow and Friday out of Tokyo.
The 61.8 fibo of the 1.3411/1.3255 move comes in at 1.3350 and there are stops above that level. A break above 1.3250 targets a full retracement to 1.3410. There is hourly support built up at 1.3320 and a break below that level could see a drift towards 1.3290. The EUR/USD trades 1.3326/31.
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