* EUR/USD rallied into the plus column from 0.8415 on rumors the European Central Bank was intervening, although the move was only from commercial bids.
The EUR's gains came close on the heels of data that showed French preliminary HICP rose a well above-forecast 2.5% year-on-year in May. The Bank of France's Trichet signaled what may be a change in the ECB's interest rate policy when he said the EUR's exchange rate was key indicator for monetary policy. Trichet's comments were backed up by BBK president Welteke, who said the ECB was watching the EUR's exchange rate closely for the risks it poses to stable prices.
Adding to previous comments, Welteke said at a bankers meeting in Zurich that euro-zone inflation would be under 2% by spring 2002 and that the ECB was watching the EUR closely for inflation risks. He warned that the German pilots' wage settlement must not spill over and that it was vital to continue a policy of low wage increases. He also said that euro-zone M3 money supply conformed to price stability and was not expansive. The outlook is mixed.

Support: 0.8415 (overnight low), 0.8411 (June 11 low; 6 1/2-month low), 0.8372 (Nov. 23 low), 0.8308 (channel line declining since Jan. 2), 0.8245 (1.382% Fibonacci extension level the Jan. 6-May 4, 19 downtrend; target of fifth Elliott wave), 0.8228 (Oct. 26 low; lifetime low).
Resistance: 0.8495 (overnight high), 0.8585 (20-day moving average), 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), 0.8898 (200-day moving average).

* USD/JPY failed to add much to Monday's rally and fell from a 20-day high of 122.08 on profit taking, leaving the 122.50 resistance area intact. Japan's Finance Minister Shiokawa said overnight he would welcome any additional monetary easing measures that might be taken by Bank of Japan Governor Hayami. Shiokawa's comments came on top of similar calls for more easing from several senior LDP lawmakers and in the wake of weak economic growth data for the first quarter released Monday.
The outlook is mixed.

Support: 121.55 (overnight low), 121.25 (20-day moving average), 121.05 (Gann 50-point pivot; targets: 120.55/121.55), 119.65 (Gann 50-point pivot; targets: 119.15/120.15), 119.00 (38.2% Fibonacci retracement level of the August 1998-December 1999 downtrend), 118.30 (June 1 trough; 3-month low).
Resistance: 122.08 (overnight high), 122.42 (60-day moving average), 122.50 (Gann 50-point pivot; targets: 122.00/123.00), 124.00 (Gann 50-point pivot; targets: 123.50/124.50), 124.05 (May 16 peak), 124.35 (April 27 peak).

* EUR/JPY was vaulted from a 4-day low of 102.44 by the EUR/USD, but the cross currency remains entangled around the 200-day moving average at 102.78.Immediate levels to watch are 103.40 on the upside and 103.00 on the downside.
The outlook is mixed.

Support: 102.78 (200-day moving average), 102.44 (overnight low), 99.85 (June 1 low; 5 1/2-month low), 97.22 (Dec. 12 trough).
Resistance: 103.40 (overnight high), 103.87 (20-day moving average), 104.48 (May 29 high), 105.80 (38.2% Fibonacci retracement level of May 1999-October 2000 downtrend), 107.73 (60-day moving average), 108.23 (100-day moving average).

* GBP/USD showed little reaction to data that showed the UK RPIX rose 2.4% year-on-year in May, only just below the upper end of the MPC's target band, although the short sterling strip moved to preclude any further UK rate cuts.
However, EUR/GBP had earlier been carried to a 3-week high of 0.6177 as the EUR leapt higher, which resulted in cable dropping to a fresh 15 1/2-year low of 1.3688.
The GBP/USD outlook is mixed to slightly bearish.

Support: 1.3688 (overnight low; 15 1/2-year low), 1.3610 (support line declining since January), 1.3660 (February 1986 trough).
Resistance: 1.3790 (overnight high), 1.4131 (20-day moving average), 1.4256 (60-day moving average), 1.4367 (100-day moving average).