The pairing continues to trade above yesterdays 0.8890 base, though fresh US name selling is capping attempted rallies with highs today so far at just 0.8915/20. Yesterdays US data proved stronger than expected, but for the time being recovery remains very sketchy. Fresh concerns over the size of the German deficit are also weighing on the Euro, and the low levels of economic growth are making it increasingly difficult to meet the stability pact targets. The economic spotlight is firmly on the EZ today, with unemployment, PPI, the sentiment index, and consumer and business confidence data with French household data earlier in the session to provide a taster. We expect resistance at 0.8940 to cap rallies whilst a break below 0.8890 is likely to trigger stops and see a fall to the 0.8850 area.