Rate drops to new lows in early New York today, aggressive liquidation by EURO-Sterling cross spreaders likely providing the main selling. Late longs are under pressure and can't ignore a break of the 50% fib defense numbers.

Bears took a stand at 1.4700 area last year and likely won't let go of shorts until technical levels are tested around 1.3660 area or lower which we have today. Technical traders will be looking for a test of the 100 day MA near-term to offer support this time after blowing through to the upside.

Traders note lots of aggressive active buying getting disappointed. Stops building under 1.3440 area likely in size; the question is will the buyers show up? Traders note some stops within range overnight suggesting longs are late or nervous. Correction lower is likely to continue a bit further but that will likely be a buy point.

EURO/USD Daily
Resistance 3: 1.4080
Resistance 2: 1.4020/30
Resistance 1: 1.3960
Latest New York: 1.3583
Support 1: 1.3550
Support 2: 1.3480
Support 3: 1.3420/30

Data due Tuesday: All times EASTERN (-5 GMT)
4:00am EUR Final Services PMI
5:00am EUR CPI Flash Estimate y/y

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