Rate drops through support Monday and Tuesday to a multi-week low; traders report large names absorbing offers ahead of 1.2600 and slightly below suggesting a potential buy point. Rate fails to hold firm on the 1.2900 handle but dips appear to be a test of support rather than a move lower so far.

Aggressive sellers likely to try and cap above key 1.3030 area; failure to hold 1.2900 likely to signal a further test of the lows but be patient. The dip is a buy opp but be nimble. Cross-spreaders likely pressure as crosses are unwound. Close above 1.3030 needed for further upside until then rallies likely to be sold into support around 1.2620/30 (?).

The USD continued to climb overnight but stalled off the highs in New York showing some signs of topping again as the long-awaited government "stimulus" bill failed to encourage investors today. At this writing President Obama is signing into law a record spending bill that has serious flaws and serious short-sighted programs in my view which will lead to a breakdown in economic recovery and a protracted recession/depression. Proponents of the bill suggest that spending will help the economy recover faster but many analysts and traders doubt that the method of investment will have little lasting effect.