Into European trading and spot matched the 1.3276 high from yesterday but this was soon bested as demand for the Euro remains robust. 1.3282 printed before an Asian central bank sold in good sizes. Dealers still note option protection ahead of the 1.3300 option barriers but stops above remain a tempting prospect.
The failure to hold onto the highs sparked some profit-taking and short-term accounts were spotted selling into the EZ PMI data. A weaker than expected headline saw longs squeezed further and smaller intraday positions were washed away in the move under 1.3235 support. Bids into 1.3220 were widely discussed so the early speculators began booking profits as these approached. Thus far the resulting rebound has worked the pair back to 1.3250 with dealers now talking lumpy bids around 1.3215.
Looking ahead, US ISM is seen as the key event-risk ahead of the week-end, as dealers ponder the potential for a sub-50 surprise at 15:00 GMT. Bernanke is set to speak in Washington early in the session while Moskow & Lacker comments are due after the European closing bell.
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