Rate two-way but falls through stops to make double-bottom at monthly support; rally back over the 1.3400 handle quickly suggests the bears are losing control from above the market and the dip may have been a technical correction.

Super-fast correction after making lows was a "drive-by" traders say. Cross-liquidation continues. Rally back as official bids absorb offers under the 1.3350 area. Sovereign offers seen into the highs last week traders say but those may be covering into the dip this morning.

Traders note sovereign offers seen above the 1.3640 area again and this time the sellers are winning. Aggressive liquidation by EURO-Sterling cross spreaders providing the main selling. Technical levels around the 1.3300 area are firm; look for a solid bounce from here. Correction lower is likely near its end, likely at a buy point on this dip to start the week.

EURO/USD Daily
Resistance 3:  1.3850
Resistance 2:  1.3800
Resistance 1:  1.3750/60
Latest New York:  1.3379
Support 1:  1.3280/90
Support 2:  1.3250
Support 3:  1.3200/10

Data due Tuesday: All times EASTERN (-5 GMT)
2:00am EUR German WPI m/m
2:45am EUR French Gov Budget Balance
4:00am EUR ECB President Trichet Speaks

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