Stops-driven sell-off scores new low last week but rate bounces smartly suggesting at least a small interest in bottoming. Failure to hold above the 1.4700 handle likely to draw in late shorts. Traders report large bids on the drop but volumes died later, lower oil pricing pressures prices all day. Traders report model/macro accounts continue selling the rate.

Traders suggesting that the rate is vulnerable to a short squeeze. Market is heavily short now so expect a rally. Larger names buying last week traders say. Likely the rate has flushed all longs. Aggressive traders can buy this dip for a return to resistance. Rate continues to track Cable and vice-versa. Now that stops are cleared a rotation higher is coming. US data this week likely to be unfriendly so be ready for whipsaw.

EURO/USD Daily

Resistance 3:  1.4850
Resistance 2:  1.4820/30
Resistance 1:  1.4770/80
Latest New York:  1.4695
Support 1:  1.4670
Support 2:  1.4650/60
Support 3:  1.4620/30

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

2:00am EUR German PPI m/m
5:00am EUR German ZEW Economic Sentiment
5:00am EUR ZEW Economic Sentiment

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