Sales in EUR/JPY, on the back of the BoJ comments, forced spot lower into the European open. Trading broke below the previous Asian base at 1.3321 and dipped to 1.3311 before renewed buyers emerged. However, with the Yen cross unable to bounce the pair continued to look heavy and ahead of the Euro Zone data speculators were seen selling.
The upward surprise from the EZ service sector helped underpin the Euro but still the EUR was sold against the JPY & the USD as the data related macro buyers were soon filled. US & Spec A/C sales dominated into the EZ retail release but prior to the data 1.3298 was printed. Small central bank bids and option related buyers (linked to the 1.33 strikes) were found and this prompted a bout of profit-taking on shorts.
Looking ahead, dealers cite the US Non-Manufacturing ISM data as the next key event-risk but before the 15:00 GMT release EUR/USD must endure more ECB comments and a raft of early US data. Challenger Jobless is set for release at 12:30 GMT followed by weekly US Chain Stores data (12:45 GMT) with the revisions to Q3 Non-Farm Productivity due at 13:30 GMT.
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