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The highly regarded  German IFO Business Climate provided a rather rare positive surprise: it rose 0.2 points to 106.6 points. Expectations stood on a drop to 105.3.

EUR/USD is climbing above the 1.3380 line and reaches 1.3392.  Significant resistance is at 1.3420.

Surprises were also recorded in the accompanying numbers: IFO Expectations for November surprised by ticking up from 97 to 97.3 points. The current  assessment remained unchanged at 116.7 points, better than a drop to 115.5 that was predicted.

This indicator tended to be positive and usually exceeded expectations before the recent round of the crisis, but also here, disappointment were recorded recently. It’s too early to know if this is a change of trend or only a one time rise.

EUR/USD was knocked down yesterday by the failed bond auction in Germany. Some analysts say its a coincidence, but the rise in German yields provide reasons to worry. 10 year German bond yields, seen as a benchmark for all euro-zone yields, are climbing to 2.2% today.

There are reports that Japanese investors are shying away from German bunds and preferring British gilts over them.

If this move fades out, support is found at 1.3320, followed by more important support at 1.3250. Moves might become a bit more fuzzy later on. US markets are closed for Thanksgiving.

For more on EUR/USD, see the euro/dollar forecast.