Rate crosses the 50 bar MA with higher volume; more losses on the way but move into the stops finds no one home; selling pressure likely not big enough now to move below the 1.5600 area easily. Support at 1.5550 likely to hold on further weakness.

Overhead resistance appears firmer on the approach to the 1.5800/20 area with stops said to be out of range above around the 1.5850 area. Traders note that the rate feels “heavy” to start the week and warn of a potential overhang of stale longs; which may have been cleared on today’s dip to 1.5600. Stops under the 1.5700 area were in size overnight and volume was good.

Look for model and momentum accounts active tonight—we need them on the offer as the break lower was negated by the bounce. Adding to the potential is the COT data showing a flip to net long from net short before the holiday; a washout is likely in my view and that may have been the move lower today.

EURO/USD Daily

Resistance 3: 1.5880
Resistance 2: 1.5850
Resistance 1: 1.5810/20
Latest New York: 1.5645
Support 1: 1.5620
Support 2: 1.5600/1.5590
Support 3: 1.5550

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

3:55am EUR German Unemployment Change -25K
4:00am EUR M3 Money Supply y/y 10.3%
5:00am EUR Consumer Confidence -12

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 http://www.forexpros.com