Rate drops back in thin conditions; resistance is sold but large names on the dips traders say; Russians possibly buying on the dips.  Stops under the 1.2600 area possibly in size.

Traders note large stops at the 1.2950 area with more over 1.3000 but offers likely to cap on first try if a bounce from potential pennant bottom holds. Bids on dips from profit-taking shorts some desks report. Rate possibly getting spillover effect from GBP and vice-versa suggesting both pairs may track each other near-term.

Support also from cross-spreaders as they unwind Yen. Official interest noted traders say. Rate is an absolute screaming buy in my view—I can't see further weakness being ignored by the buyers. Traders note the rate is finding profit-taking bids on dips so far despite the uncertainty in the market.

EURO/USD Daily

Resistance 3:  1.3200/10
Resistance 2:  1.3150
Resistance 1:  1.3030
Latest New York:  1.2535
Support 1:  1.2480
Support 2:  1.2420/30
Support 3:  1.2400

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

5:00am EUR Industrial Production m/m
1:00pm EUR ECB President Trichet Speaks

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