The greenback traded weaker against the major currencies at the start of the week amid improving global risk-appetite, with the euro coming just shy of the 1.23-level while the British pound topped the 1.48-mark. The Dow Jones and the S&P 500 edged up higher by around 0.5% as fears for a double-dip US recession continued to mitigate. Speaking in Tokyo overnight, St Louis Fed President James Bullard played down fears that the current deficit-crisis in the Eurozone will derail the nascent US economic recovery, highlighting that in the near-term it would be beneficial to the US as it lowers yields on treasuries as well as commodity prices.

The US data flow was light today but will pick up in Tuesday trading with the NY Fed manufacturing survey, May import and export prices, the April net long-term TIC flows and the June NAHB housing market index. The NY Fed manufacturing survey is forecast to improve to 20.0 in June from 19.11 a month earlier. Meanwhile, the net long-term TICS flows are estimated to print at $50 billion in April, albeit sharply lower than the March reading of $140.5 billion. The NAHB housing market index is estimated to ease slightly to 21 in June compared with a 22 reading from May.

Markets had a tepid reaction to Moody's credit downgrade of Greece to junk status at Ba1, cut by for steps. The euro drifted to session lows but managed to hold steady above the 1.22-level. Upbeat industrial production data from the Eurozone overnight helped support the European equity bourses, with the April industrial production higher by 0.8% on a monthly basis and surging by 9.5% on an annualized basis.

In the coming session, traders will look ahead to Germany's June ZEW sentiment survey, the April Eurozone trade balance, and the Q1 employment rate. EURUSD will find support around the 1.22-level, followed by 1.2170 and 1.2140. Subsequent floors are eyed at 1.21, backed by 1.2060 and 1.2030. On the topside, resistance will emerge at 1.2265, followed by 1.23 and 1.2340. Additional ceilings will emerge at 1.2370, followed by 1.24 and 1.2450.