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 (?).

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 1.2920/50 area now likely to offer resistance so expect two-way action and consolidation underneath. 

EUR/USD Daily

Resistance 3: 1.3080
Resistance 2: 1.3020/30
Resistance 1: 1.2990/1.3000
Latest New York: 1.2604
Support 1: 1.2790/1.2600
Support 2: 1.2550/60
Support 3: 1.2500

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

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