The euro initially jumped this morning following the release of the German IFO business confidence survey, but subsequently dove on broad US dollar demand. The IFO index rose to 90.5 in August from 87.4, marking the fifth consecutive increase and beating expectations for a rise to 89. It looks like the steep rally in equities in July along with Germany's 85 billion euro stimulus package has helped to boost sentiment. However, with the growth seen in Q2 anticipated to moderate later in the year, sentiment may follow suit. Looking to EURUSD, the pair broke below support and former resistance at 1.4260, and though solid support has come into play at 1.4210, the ability of the DXY index to hold above a key trendline connecting the July 2008 and August 2009 lows indicates that the greenback remains within an uptrend.
