German business optimism drove the euro to within two points of its 2014 high but weak upward momentum capped the gain and by mid-morning in New York it was trading at the day's low.
The IFO index of business sentiment across Germany in February rose to 111.3 from 110.5 for the best reading in over two and a half years. Economists had forecast a slight drop to 110.5.
The measure of current conditions jumped to 114.4 from 112.4, the highest reading since July 2102 and much better than the 112.8 prediction. The index of expectations, the view of economic and business conditions in six months, fell marginally to 108.3 in February from 108.9; 108.1 had been expected.
The euro shot up from 1.3753 to 1.3770, the day’s high so far, in the minute after the release of the data at 4:00 am ET and then spent the next two hours trading between 1.3757 and 1.3769. But the lack of buying energy was evident and each subsequent top in the period was lower.
Just after 6:00 am ET the euro fell below 1.3750 in a short series of steps that lasted about 10 minutes, consolidated for a time at 1.3720 and then dipped to 1.3707.
There was no more momentum for the sellers at the bottom than there had in the buyers at the top and the reversal back to 1.3720 took six barely five minutes. The euro again traded around 1.3720 for a prolonged period before running 25 points higher to 1.3745 moving into the London close at noon without challenging 1.3750.
There is good resistance at 1.3750, above 1.3772 and 1.3800. Support at 1.3700.
Chief Market Strategist
WorldWideMarkets Online Trading
Charts: Alpha Trader, Bloomberg