Summary Continued volatility plagued the majors the past 24 hours as the USD continued to consolidate gains earned overnight although signs of topping continue. Overnight news as well as US data this morning failed to extend US gains past early highs seen in New York after the release of ADP private payrolls estimates. Showing another large drop projecting a dip in NFP on Friday, ADP came in at -553K.

Rate blasts through the 1.3030 key S/R area; likely on the way to the recent 1.3300 area top. Follows GBP in two-way action today then rebounds, cross-spreaders likely pressure as crosses are unwound during the day.

Two-way action overnight in light volume as stops get triggered under 1.2850 area and below but sellers run out on support at the 1.2800 handle. Close back above 1.3030 argues for another test of the 1.3300 area weekly highs. Downside bias likely running out as rate held solid support numbers around the 1.2700/20 area.

Rate rallies and takes EURO with it; traders note stops and active buying above the 1.4300 area. Any correction a buying opportunity now as the rate begins to squeeze shorts.

23 year lows are very likely to hold on any break. Possibly unwinding of GBP crosses pressuring the rate back to and above the 1.4300 handle near-term. Light stops seen on the move under 1.4200 with likely active selling dropping into lows overnight but the rate recovers New York suggesting the bulls are in control.

High volatility was the rule today as the majors advanced sharply against the Greenback as mixed data and stops in thin conditions exaggerated moves. Despite poor earnings from US automakers equities were able to hold onto slight gains into the end of the day helping to hold both EURO and USD/JPY off their lows and in the case of EURO to trade above previous resistance in the 1.3030 area for a high print 1.3037 before trading a full handle lower mid-day.

 Rate follows GBP lower, cross-spreaders likely pressure as crosses are unwound during the day. One-way action overnight in light volume as stops get triggered under 1.2750 area and below but sellers run out on support at the 1.2700 handle.

Major resistance is now back at 1.3030 area and a close back above there argues for another test of the 1.3300 area weekly highs. Downside bias may be running out as rate is now on solid support numbers around the 1.2700/20 area. Pullback argues the squeeze is over.