The pair closed in NY Wednesday at $1.2859 after recovering off a pullback low of $1.2834. Rate had seen volatile action during Fed Bernanke’s testimony, the prepared text seemed to back away from a tapering, ‘premature tightening would carry substantial risk’, which spiked rate to a session high of $1.2998 before it dropped back during the Q&A as market focused on the flexibility message that tapering will be based on an assessment of the economy, if the data supports sustainability. Rate remained supported above $1.2850 in early Asian trade before it was pressed down to extended pullback lows of $1.2824, the move seen led by Aussie sales. However, demand for euro-Aussie provided support and allowed euro-dollar to recover to $1.2856 before it settled around $1.2850 ahead of the European open. Focus this morning will be on the release of flash EZ PMI data (France at 0658GMT, Germany 0728GMT, EZ 0758GMT). Data viewed as more forward looking with market looking to see if it signals improvement in recently released soft GDP data in Germany and France. Fed Bullard speaks in London at 1005GMT, with US weekly jobless at 1230GMT to provide afternoon focus. Bids $1.2820/790, stops below. Offers $1.2860/80, $1.2900/20, stops $1.2925/35.
