The EUR/USD has recovered well from Friday lows, propelling from our 2nd tier downtrend line before fading beneath Wednesday highs. The EUR/USD is now hovering back around its highly psychological 1.50 level as investors continue to dissect news concerning Dubai. Regardless, the currency pair is back in its safe zone following Friday's scare and the EU econ data wire is relatively quiet until Thursday's ECB meeting. Although Trichet and the ECB have used more aggressive language in regards to their intent to begin winding down some alternative liquidity measures, there is a bit of uncertainty concerning how the ECB will behave come Thursday due to the incident in Dubai coupled with mixed global econ data. That being said, the ECB did release a Flash CPI today which was one basis point hotter than expected (0.6% vs. 0.5%). Therefore, consumer prices seem to be picking back up with all of the liquidity washing around. The EU will also release German Retail Sales tomorrow along with Germany's Unemployment Change and the headline EU Unemployment Rate. These data points follow potential market movers in the form of China's Manufacturing PMI and the RBA's monetary policy decision. As a result, we could see activity heat up in the next 24 hours.

Meanwhile, the Euro's present relative strength is helping the currency pair hold up strong around its 1.50 level while creating some space between present price and our uptrend lines. Last Wednesday's surge past October lows was a very bullish move, allowing the EUR/USD to weather the Dubai storm thus far. As a result, both the EUR/GBP and EUR/AUD are performing rather well. However, the EUR/USD may be forced to follow suit should equities and other major Dollar crosses take a turn for the worst. That being said, investors should keep an eye out for our 1st tier uptrend line should it be tested. Our 1st tier runs through November lows. Hence, a movement below the 1st tier may indicate a more protracted pullback towards the 1.460 area. As for the topside, the EUR/USD faces our 3rd tier downtrend line along with previous November highs the psychological 1.50 level.

Present Price: 1.5000

Resistances: 1.5021, 1.5036, 1.5049, 1.5071, 1.5082, 1.5097, 1.5117

Supports: 1.4992, 1.4979, 1.4961, 1.4937, 1.4920, 1.4903

Psychological: 1.50, November Highs and Lows