New low on follow-on selling overnight; rate reaches to tech support around 1.2880 but traders say conditions are still on the thin side but better than Friday. Rate has two-way action into the lows suggesting short-term traders and profit-taking by the shorts.

Support at or around the 50 day MA now being tested; the 50 day MA is next level needed to hold for the bulls to feel comfortable this week. Need a rally back over within 72 hours for the drop to be considered a correction and not a breakout.

Rate likely has stops building in both directions; overhead resistance likely drops to the 1.3080 area; Long-term bulls are likely still in control of the market and this significant pullback is a buying opportunity in my view.

EURO/USD Daily

• Resistance 3: 1.3380
• Resistance 2: 1.3330
• Resistance 1: 1.3290
• Latest New York: 1.227
• Support 1: 1.2880
• Support 2: 1.2850
• Support 3: 1.2820

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

• 2:00am EUR German PPI m/m
• 4:00am EUR Italian Trade Balance
• 5:00am EUR German ZEW Economic Sentiment
• 5:00am EUR ZEW Economic Sentiment

Forex Analysis by Jason Alan Jankovsky at ForexPros.com. For more details about Forex Trading and Tips for decent earnings through Forex Trading, Please check forexpros.com