Two-way technical trade holds pair close to Friday's action; lows holding at 1.4900/10 area. Bounce off early weakness suggests buyers are willing on dips; aggressive traders can buy the next dip in my view, look for prices around the 1.4780 area. Rally in EURO holds under pressure from cross spreaders; stops not enough to hold above
1.5050 area.

Cross-spreaders likely keeping pressure on as GBP/EURO cross holds near lifetime high. Although close is above the 1.4850 area the failure at highs is a caution. Some spillover from EURO likely. Traders note solid two-way action.

The USD opens the week on a softer note and remains under light pressure at the start of New York trade. Overnight action was subdued with most of the action contained in Yen cross spreads after the release of Japan's Tankan report; traders note that the report was very soft and below forecasts prompting some analysts to expect the BOJ to cut interest rates at some point soon. With rates at .3% from the BOJ it is difficult to expect that a rate cut would help much as the bank has held effectively a zero-rate policy since the 1990's; USD/JPY is lower at 90.74 with highs at 91.37 and lows at 90.47 making for an inside range day with lower two-way action.

The foreign exchange reserve of India continues to decline in the month of October. It fell by $1.83 billion for the week ended December 5 and currently stands at $245.86 billion. The dip is caused following measures taken by Reserve Bank of India to stop further depreciation of rupee. Revaluation in foreign currencies and large scale pullout by foreign institutional investors also contributed in the fall of foreign reserve.

Rate continues to hold above previous support. Spillover from GBP helps hold the rate above support at 1.2950 area but lack of follow-through above 1.3050 a caution to the bulls. Buyers are willing on dips. Possible reversal now in play but the rate needs to firm above the 1.3050 area now that stops are cleared in my view.

Bids seen on dips traders say. Dips likely to be bought hard now that sellers couldn't make a stand over 1.3000 with confidence on the third try this week; stops at 1.3080 and above likely the next target. Aggressive traders can ADD to open longs again.

Despite rally in EURO rate holds near opening levels, firms after yesterday's drop. Rate continues to hold support at 1.4740. More upside now due within 24 hours if dips continue to be bought above the 1.4720 area. Close near the 1.4850 area or above will confirm willing buyers on the dips; might have to wait for tomorrow.

Aggressive traders can look to ADD to open longs anytime looking for a push through and a close back above 1.5000. Some spillover from EURO likely. Good bids reported but supply seen from semi-official names overnight.