Resistance 3: 1.3200/10

Resistance 2: 1.3180

Resistance 1: 1.3100/10

Latest New York: 1.2966

Support 1: 1.2900/10

Support 2: 1.2850

Support 3: 1.2780


Rate two-way despite sharp fall in GBP; likely cross spreaders supporting on the dip as active sellers attempt to push the rate lower into major support around the 1.2780 area. Bottom may be forming around under the 1.3030 area as the drop into the 1.2900 handle was on thin volume. 50 bar MA failed now likely to offer resistance and a close above suggests the bottom will be in. Sell signal from the toolbox validated by the drop but be cautious as trend line support approaching. Semi-official and sovereign bids and offers seen overnight. Technical levels around the 1.3300 area now likely to offer resistance so expect two-way action and consolidation. Look for a solid bounce from here. Aggressive traders can look to buy the next dip.

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

2:00am EUR German PPI m/m

3:00am EUR ECB President Trichet Speaks

4:00am EUR Italian Trade Balance

4:30am EUR ECB President Trichet Speaks

Forex Analysis written by Jason Alan Jankovsky, featured by