The euro traded in proximity to three-week highs against the US dollar, following data that revealed the business confidence in the largest euro zone economy, Germany, rose to a 30-month high.
EUR/USD touched a session high at 1.3717 at 09:20 GMT, after which consolidation followed at 1.3700, adding 0.17% for the day. Support was likely to be received at January 24th low, 1.3663, while resistance was to be met at January 24th high, 1.3778, also the pairs highest since January 2nd.
The euro drew support, after data showed the German business climate increased to the strongest level since mid-2011.
A report by the IFO Institute for Economic research, revealed that its German business climate index climbed to 110.6 in January from 109.5 in the previous month, marking the strongest level since July 2011. According to the median analyst forecast the index should have increased to 110.0.
Each one of the two sub-indexes of the IFO business climate index have 50% weight. Both registered advances in January. The index which tracks the economic expectations of the respondents for the next six months advanced to 108.9 in January from 107.4 in the preceding month. Analysts had estimated that the index will rise to 108.0. The current assessment sub-index also increased to 112.4 in January, matching analysts projections and higher than Decembers reading of 111.6.
The index is published on a monthly basis and is based on a survey among 7 000 German companies in different sectors, from retail to construction and manufacturing.
Meanwhile, greenbacks demand continued to be underpinned by expectations for stimulus cuts at the upcoming FOMCs meeting this week, which is scheduled to be held on January 28th-29th.
The Federal Open Market Committee (FOMC) will probably reduce the monthly pace of bond purchases from the current 75 billion USD by increments of 10 billion USD at every policy meeting to exit the program this year, according to the median estimates by experts in a survey by Bloomberg conducted on January 10th.
New home sales in the United States probably decreased 1.9% to the annualized level of 0.455 million units in December, according to the median forecast of economists, after sales reached 0.464 million units in the preceding month. The official report is due to be released at 15:00 GMT today. New home sales are a crucial indicator for current housing market conditions in the country, as better than expected figures will certainly provide support to greenback’s demand.
The yield on US benchmark 10-year Treasury bonds climbed two basis points, or 0.02 percentage point, to reach 2.73%.
Elsewhere, AUD/USD touched a daily high at 0.8737 at 7:10 GMT, after which consolidation followed at 0.8716, still gaining 0.37% for the day. Support was likely to be received at January 24th low, 0.8660, also the pair’s lowest point since July 19th 2010, while resistance was to be encountered at July 24th high, 0.8775.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
