Resistance and Levels
Today the USD again whipsawed traders primarily, approaching on the board higher from overnight trades. Again, a falling made lows on the day in some pairs. After a strong start in the morning, equity prices started falling back underscoring the general weakness and the situation of the US economy. Many feel that the USD is going to be under threat this week, as more equity losses are expected, and the G8 will not help to the Greenback near-term. Traders should note that G8 summit would be long on rhetoric and small action with the most possible agreement, which is going to be some kind of announcement that the US is going to open. The SPR is soon going to reduce the oil prices. Should it be the case for major currency pairs and an ecstatic rally in stocks? USD and bonds is likely to see a major improvement in some major pairs. At the end of this week, any help for US dollar might accelerate further losses. On the day, the GBP started with its low at 1.9647, but once stocks started falling the GBP rallied along with EURO and overturned to trade in the  range of 1.9760/70 area after the London fix. The EURO also overturned hard after making a low of 1.5610, the rates made a rally to the area 1.5724 after making a new high of 1.5755; in both EURO and GBP stop loss was noted on the way higher, as late shorts were crushed. In my views, the day traders had a best evidence for EURO long this morning on the declaration that the model accounts were in the area of 1.5640. USD/JPY pair made a high of 107.75. This morning on slight volumes before turning lower, traders note that stop loss at 107.20 areas and 107.00 areas helped to push the rates to a new low of 106.65, before some bounce could be seen. Closing back over 107.00 areas there was a pause for the bearish and if you have a short trade working and expect the rates to rally back to their highs before turning to their low again. In the next, few trading session lots of whipsaw is expected as the USD traders will try to make logic of the contradictory rhetoric and its basics. Tomorrow’s data is likely to be disappointing but some volatility is expected after the release of homes sales data. During overnight trading, you can expect a two-way session with the USD that is likely to be slightly better in morning on follow-on volatility.
GBP/USD daily
R3:  1.9900
R2:  1.9850
R1:  1.9820/30
Latest New York: 1.9763
S1:  1.9650/60
S2:  1.9600
S3:  1.9550
Comments
After a fix reversal the stocks lose their ground, stops required to the upside. Around 1.9660 area bids from “large names”, cushion the break as the week begins, a convention clear many of the weeks short. This week traders are expecting GBP to track the EURO. Low print at 1.9660 areas involved some short covering. Traders are now expecting a high as the rate had a thinner volume on the rates reported last week and overnight. A rate fails at high prints near the previous resistance a correction is still mounting. This week the EURO is likely to spill out its weak spot/power. Continue a lot cross trading is expected. G-8 data may again create some whipsaw.    

Resistance EURO/USD Daily

R3:  1.5800/10
R2:  1.5780

R1:  1.5750/60

Latest New York:  1.5715

S1:  1.5600/10

S2:  1.5580

S3:  1.5550
Comments
The USD malaise as the rates rally back hard on falling stocks, aggressive selling at 1.5630/40 area is seen by model accounts absorbed as the rate rallies; so in the nest 24 hours look for the rates to top. A major support is at 1.5580 areas and slightly below. Fewer than 1.5700 area stops elected but option resistance is reported at 1.5650 areas. According to traders, Asian sovereigns have sold aggressively on and it is noted that they will do it again this week. Stop loss is noted under previous lows under 1.5600 to 1.5550 traders say. Should the rope break—EURO might go with it. The 50 bar mark is likely to offer support, should the rate fall back; bids are likely to be in the areas of 1.5580 as a result. Still a valid exponential reversal is seen. Looking for a sell position on this strength.