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The euro launched its first attack of the week against the 1.3400 frontier on Thursday after hiking to an intra-day high of 1.3390. Currently, the EUR/USD is trading at 1.3375, closing the day 0.45% above its opening price.

The move higher in the EUR/USD was supported by strong PMI data from the eurozone and U.S., as well as a much better-than-expected jobless claims reading. Despite the sharp rise in stocks, with the S&P piercing 1500 for first time since December 2007, the dollar trades firm versus most competitors, with the main exception being the euro.

As for the short term, the next resistance is at 1.3395 (high January18) ahead of 1.3405 (2013 high January 14) and 1.3450 (Upper Bollinger). On the downside, a breach of 1.3265 (low Janurary 23) would aim for 1.3260 (low January 22 and 23) and then 1.3250 (low January 11).

The U.S. Dollar Index, which tracks the greenback against its major rivals, is trading almost unchanged on Thursday, keeping the psychological handle at 80.00 despite the prevailing risk appetite.

Are We Ready For 1.3500? Scope To 1.40

Not even 1.3400, as the pair seems to be ready to assault.'s Analyst Richard Lee asks investors if are we ready for 1.3500. "Bouncing off of 1.3300 psychological support, the EUR/USD has continued to remain mired in short-term consolidation," notes Lee. "Further advances higher on the 1.3500 will continue to be contingent on a sizable break above the 1.3394 resistance level."

However, even though the euro managed to move higher on Thursday, printing a high of 1.3392, the EUR/USD remains firmly in range with 1.3400 on the upside and 1.3250/60 on the downside as major lines to cross.

In the bullish side, the Economics Research Team at Goldman Sachs has changed its EUR/USD forecast to 1.4000 "flat over the next 3 and 6 months, from 1.2500 and 1.3300 previously -- spot has pushed through our previous forecasts as the euro area risk premium was unwound, and we expect this to continue."

"Several benchmarking exercises suggest a move to EUR/USD 1.40 is likely, but we would assume that euro area and ECB policymakers would respond to currency appreciation beyond that level. Aside from political issues, the external balance of the euro area remains in a very solid position, which stands in contrast to the situation in the U.S., and this relative picture is positive for EUR/USD," the team adds.

The Friday Ahead

A quick glance at tomorrow's docket in the euro area is enough to highlight the German IFO series as the most relevant release in the bloc, seconded by the Greek Current Account and Producer Prices in Spain. Across the Atlantic, the housing sector would again be in the limelight, as the New Home Sales are expected to rise 2.1% during December, more than halving the previous +4.4%.

Source: Forex: EUR/USD Closes Above 1.3350 - Ready For 1.34?