Rate continues to trade with a heavy....>

EURO-DOLLAR: Rate continues to trade with a heavy feel, the EUR feeling the

weight from a generally strong USD and position adjustments ahead of Thursday's

ECB announcement. Most expect the ECB to move to an easing bias, providing a

signal for a cut in Sep, while others see chance for a 10bp cut at this meeting.

Rate touched an extended low of $1.1146 in late NY trade Tuesday, opened in Asia

at $1.1156 before it drifted back through the rest of the Asian session,

touching $1.1141 into early Europe. Mild support seen into $1.1140, a break to

expose $1.1125/16 (May31/May30 lows) ahead of $1.1107 (YTD low May23).

Resistance seen into $1.1158. Rate has been tracking its 10-dma 1.0% envelope,

the base of which comes in at $1.1110. Looking at the chart the rate has been

respecting these parameters, especially on a close basis.

- Flash PMI readings due from France, Germany and the EZ this morning, from

0715GMT. Any negative reading will be seen adding weight to those calling for

action to be announced Thursday. EZ M3 to be released at 0800GMT.