Into European trading and the UK was the main focus of the market. Inflation data was key to many but the Euro managed to elicit its own support after a robust January ZEW reading. With the Pound generating the bulk of the headlines EUR/USD was able to move quietly higher and after breaking 1.2960 (to trigger stops) the 1.2990/3000 level is now in sight.
Looking ahead, the early North American trading direction is expected to be generated by a combination of the ability of the Euro to break above 1.3000 and the 13:30 GMT release of NY Fed Empire State data. The January report is expected to come in at 20.00 compared with the previous 23.13 but any deeper drop and the US unit will struggle while the stops seen above 1.3005 are acting as a short-term bull target.
Offers are seen trailing back from 1.2990, that include option related interest (linked to the 1.30 expiry interest rumoured for today and tomorrow), to 1.3000 while on the downside 1.2945/50 props. After the European close the attention will turn to the ECB's Stark comments that are set to air around 19:15 GMT.
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