Rate fails to follow-through and holds the 100 bar MA. Strong buy signal coming soon if not yet later this afternoon. Rate falls on rumors and stops; could be a washout. Stopped out of position so we will look at the long side again to end the week tomorrow.

Rate finds support as more rumors of semi-official demand. Stops noted on a break under the 1.5500 area. Late longs squeezed as comments from ECB officials slow upside. Support under the 1.5440 area appears solid. If buying today—ok to hold longs for a return to the 1.5800 area this week. Stops and bids noted at the 1.5580 area in size with option defense expected at 1.5550.

Trichet hints at a rate hike for July but today’s rhetoric a bit softer; I think that is only to stem a rapid rise too quickly. Overhead resistance appears firmer on the approach to the 1.5800/20 area which is a likely to offer upside resistance through the rest of the week.  

EURO/USD Daily

Resistance 3:  1.5500/10
Resistance 2:  1.5480
Resistance 1:  1.5450/60
Latest New York:  1.5422
Support 1:  1.5380/90
Support 2:  1.5350
Support 3:  1.5320

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

2:00am EUR German CPI m/m
5:00am EUR Labor Cost Index
6:00am EUR Employment Change

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