Rate makes two-pip monthly low before bouncing back to the 1.2950 area, rallies again ahead of fix to clear stops said to be resting around the 1.3020/30 area but holds. Rate reaches to tech support around 1.2880 but traders say conditions are still on the thin side.

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. Stops above the 1.3030 area likely today.

EURO/USD Daily

• Resistance 3: 1.3120
• Resistance 2: 1.3080
• Resistance 1: 1.3020/30
• Latest New York: 1.3005
• Support 1: 1.2880
• Support 2: 1.2850
• Support 3: 1.2820

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

• 3:00am EUR French Flash Manufacturing PMI
• 3:30am EUR German Flash Manufacturing PMI
• 4:00am EUR Current Account
• 4:00am EUR Flash Manufacturing PMI
• 4:00am EUR Flash Services PMI
• 5:00am EUR Industrial New Orders m/m
• 9:00am EUR Belgium NBB Business Climate

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