Rate follows GBP in two-way action, holding support now above the 1.2600 area once again. Aggressive traders can add to open longs on this dip but BE CAREFUL as volatility is just huge.

Test of today’s lows likely at this point but traders note big names on the buy side on dips under the 1.2600 and 1.2620 area. Cross-spreaders supporting rate as GBP drops. Upside stops likely building in the overhead resistance at 1.2720/30 area now with stops likely the other side.

Key 1.3030 area likely next; failure to hold 1.2900 likely going to be the test for the bulls this week. Close above key 1.3030 area needed for further upside until then rallies likely to be sold so expect more two-way action. Bulls are still attempting to find a bottom. 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: 1.2780
• Resistance 2: 1.2750
• Resistance 1: 1.2720
• Latest New York: 1.2652
• Support 1: 1.2550/60
• Support 2: 1.2480
• Support 3: 1.2450

Data due Wednesday: All times EASTERN (-4 GMT)

• 3:00am EUR German PPI m/m
• 7:00am EUR German Factory Orders m/m

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