* USD/JPY advanced to a 13-day high of 123.16 amid earlier Nikkei weakness and more pessimism over the speed of Japanese PM Junichiro Koizumi reforms.
Steady demand from a Swiss name led the way higher toward rumored 123.20 option strikes. The market remains divided on the outlook for the JPY from here, but some commentaries note that at 122.50-123.00 the pair is in the middle of the 120.00-125.00 range. The latest IMM COT data shows specs have now almost fully unwound their large short JPY position. The outlook is mixed to slightly bullish, with support at 122.50 from the Gann 50-point pivot that targets 122.00 and 123.00.

Support: 122.50 (Gann 50-point pivot; targets: 122.00/123.00), 122.35 (overnight low), 122.20 (20-day moving average), 121.71 (60-day moving average), 121.05 (Gann 50-point pivot; targets: 120.55/121.55), 120.53 (May 4 low).
Resistance: 123.16 (overnight high), 124.00 (Gann 50-point pivot; targets: 123.50/124.50), 124.35 (April 27 peak), 125.50 (Gann 50-point pivot; targets: 125.00/126.00), 126.84 (April 2 high; 29-month high).


* EUR/USD fell to a 26-day low of 0.8730 late in Asia amid signs that Friday's U.S. data would continue to weigh this week. The pair trimmed losses amid vague rumors of central bank bids and a general lack of interest. EUR/USD hit a morning session high of 0.8758 before settling back.
News has been thin on the ground, with the Italian election dominating. The Berlusconi center-right coalition gained the majority in both the upper (Senate) and lower (Chamber of Deputies) houses.
BBK president Welteke defended the ECB's surprise rate cut, saying the timing showed the bank's independence from some finance ministers. The outlook is mixed to slightly bearish, with traders targeting the year low at 0.8695.

Support: 0.8730 (overnight low), 0.8695 (April 18 low; 4-1/2-month low).
Resistance: 0.8770 (overnight high), 0.8790 (38.2% Fibonacci retracement level of the June-October downtrend), 0.8848 (61.8% Fibonacci retracement level of the Nov. 27-Jan. 5 uptrend), 0.8901 (20-day moving average), 0.8935 (200-day moving average), 0.8963 (50% Fibonacci retracement level of the June-Oct.downtrend), 0.8979 (61.8% Fibonacci retracement level of the July 26-Oct.26 downtrend), 0.9091 (April 5 peak).


* EUR/JPY reversed some of the Friday's losses but remained in an inside range. The outlook is mixed.

Support: 107.11 (overnight low), 106.80 (May 11 low), 106.69 (April 18 low; 7-week low), 105.80 (38.2% Fibonacci retracement level of May 1999-October 2000 downtrend), 104.15 (Feb. 16 trough; year's low).
Resistance: 107.70 (overnight high), 108.76 (20-day moving average), 109.15 (100-day moving average), 109.54 (60-day moving average), 111.02 (50% Fibonacci retracement level of May 1999-October 2000 downtrend).


* GBP/USD slipped within Friday's range before a Canadian name was spotted selling EUR/GBP aiding a GBP rebound. Having risen behind EUR/USD to 0.6180, the cross was sold back to 0.6165.
UK Apr PPI data came in much as forecast, showing a rise in output prices, while input prices remained in check and had little market impact. The outlook is mixed to slightly bearish.

Support: 1.4162 (overnight low), 1.4143 (May 11 low; 4 1/2-month low), 1.3966 (Nov. 24 trough).
Resistance: 1.4192 (overnight high), 1.4325 (20-day moving average), 1.4385 (60-day moving average), 1.4402 (61.8% Fibonacci retracement level of Nov.-Jan. uptrend).