The EUR/USD opened in Asia around 1.3330 after popping higher in the wake of weaker than expected US new home sales data. The EUR/USD traded up to 1.3336 when early Tokyo bought EUR/JPY up from 157.37 to 157.79 and then eased back to 1.3323 when the cross buying subsided.
The EUR/USD then settled in a 1.3325/35 range for the balance of the session while the USD/JPY and EUR/JPY was the main focus of the Asian market today. The rapidly shifting Fed expectations and EUR/JPY flows have been the main drivers of EUR/USD moves lately, but German IFO later today might see the spotlight temporarily shift to the EZ economy. European data has been solid of late while EZ and ECB officials have been generally upbeat about the EZ economy.
The German IFO should confirm that view or risk the EUR/USD shifting below hourly support around 1.3320. Key resistance is found at 1.3350, which is the 61.8 fibo of the 1.3411/1.3255 move. Stops are eyed above 1.3350 and a break above that level targets last week's high around 1.3410. Talk of a 1.3250/1.3450 DNT option should limit extended moves ahead of Bernanke on Wednesday.
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