Rate drops hard on liquidation, stops, and new selling as aggressive sellers try to cap above key 1.3030 area; drop sees large names on the bid suggesting the dip is a buy op. Aggressive traders can ADD to open longs under the 1.2850 area.

Follows GBP in two-way action and rally in GBP took EURO with it for highs in New York at 1.2930 area. Cross-spreaders likely pressure as crosses are unwound. Two-way action overnight in light volume as stops get triggered under 1.2850 area and below but sellers run out on support at the 1.2800 handle again.

Close back above 1.3030 argues for another test of the 1.3300 area weekly highs. Bulls are still attempting to find a bottom. 50 bar MA failed now likely to offer resistance and a close above suggests the bottom will be in. Technical levels around the 1.3300 area now likely to offer resistance so expect two-way action and consolidation. 

UR USD Daily

Resistance 3: 1.320/30
Resistance 2: 1.3150
Resistance 1: 1.3080
Latest New York: 1.2854
Support 1: 1.2820
Support 2: 1.2750
Support 3: 1.2700

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

5:00am EUR Italian Prelim CPI m/m
6:00am EUR German Factory Orders m/m
7:45am EUR Minimum Bid Rate
8:30am EUR ECB Press Conference

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