Resistance 3: 1.2900

Resistance 2: 1.2850

Resistance 1: 1.2820/30

Latest New York: 1.2645

Support 1: 1.2520/1.2500

Support 2: 1.2450/60

Support 3: 1.2400

Comments

Rate follows GBP higher from overnight but still an inside range despite two-way action. Still suggesting a point on indecision; traders note stops building above the market around the 1.2630 area or so cleared after the lows suggesting short-term traders active. New weekly low rejected fairly hard suggesting a re-test is a solid buy if not already long on the dip. Traders report some semi-official interest the past 24 hours. Resistance is still formidable but large names on the dips traders say. On a rally, traders note large stops at the 1.2950 area with more over 1.3000 but offers likely to cap. Support also from cross-spreaders as they unwind Yen. Official interest noted traders say. Rate is an absolute screaming buy in my view—I can’t see further weakness being ignored by the buyers. Traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market.

Data due Tuesday: All times EASTERN (-5 GMT)

4:00am EUR Italian Trade Balance

1:30pm EUR ECB President Trichet Speaks

Forex Analysis - Written by Jason Alan Jankovsky

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