ECB Concern on EUR Strength Weighs

The corrective pullback away from Tuesday's (Sep01-YTD high) posted high of $1.2011 extended to $1.1822(76.4% $1.1763-1.2011) Wednesday. Initial recovery efforts were capped below $1.1850, eased to $1.1823 before it edged back to $1.1858 into the close. Early consolidation in Asia before USD demand emerged which eased rate back toward Wednesday's low. Reaction to an FT report, that several ECB board members spoken to had voiced concern about the recent strength of the EUR, took rate below $1.1800 to $1.1797. Some demand encountered which allowed rate to settle back above $1.1800 into Europe. Reports suggest that IMM and leveraged accounts remain long EUR/USD though pain only expected should rate extend correction below $1.1700-1.1690. Some said to be watching real money accounts, if they begin to reduce long exposure could signal a deeper correction underway. For current levels, support seen into $1.1780($1.1782 76.4% 1.1711-1.2011), stronger into $1.1750. Resistance $1.1822, $1.1860/70. Release of Services PMI's in the EZ provi8des early focus. EZ Retail Sales at 1000BST. US Trade and Weekly Jobless Claims will be watched ahead of Friday's NFP. US Svcs PMI and non-mfg ISM also in view.. ECB Schnabel speaks at 1600BST. Fed Evans(non-voter) speaks at 1730BST.