Resistance 3: 1.3380

Resistance 2: 1.3330

Resistance 1: 1.3280

Latest New York: 1.3207

Support 1: 1.3150

Support 2: 1.3100

Support 3: 1.3080

Comments

Rate fails at support and clears large stops under 1.3200; rate likely has stops building in both directions but shorts have taken control of the market as the rate gives back gains over the 1.3400 area last week late. Action remains two-way; stops under 1.3150 area said to be building in size suggesting the rate has another leg lower coming near-term. That dip would be a buy opportunity in my view. Overhead resistance of 1.3350 area now back in play; expect sellers in that area on a rally. Asian sovereigns seen selling rallies last week and a US bank seen leaning on the rate at the open; no doubt momentum traders from Friday€™s close. Long-term bulls are likely still in control of the market and this significant pullback is a buying opportunity in my view but the timing needs another day or two to work through. Expect two-way action.

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

3:55am EUR German Unemployment Change

4:00am EUR Italian Retail Sales m/m

5:00am EUR CPI Flash Estimate y/y

5:00am EUR Italian Prelim CPI m/m

Forex Trading Analysis written by Jason Alan Jankovsky, featured by forexpros.com