EUR/USD shook off early weakness and ended the US session firmer after testing important resistance at 1.2965. Expect the area between 1.2965 and 1.2990 to be a sticking point on rallies just as it was on repeated dips before finally breaking lower late last week.

Denials from the French and the Germans that they were pressuring Portugal to take a bailout helped cool downside pressure on the euro.

Also helping boost the single currency was moderately heavy covering of EUR/CHF shorts. Traders noted a good deal of flow out of CHF and into the not-quite-as-groovy Swedish krona.EUR/CHF bounced from 1.2435 to 1.2560 on the day while EUR/SEK fell to 8.9025 from 8.95.

AUD/USD recovered from the lowest levels since mid-December, dipping to 0.9883 before recovering to nearly 0.9970 before running out of steam this afternoon. AUD took comfort from the calming of European jitters, the recovery of early equity losses in the US (we end down small, 0.2% in the S&P) and a recovery in commodity prices (CRB up 0.9%). Resistance is strong between 0.9975 and 85; stops are eyed above 1.00.

USD/JPY slipped below support at 82.85 today, triggering stops from stale longs. Somewhat lower US yields (10-year note down 0.4 bp to 3.29%) along with stalling upside momentum were the catalysts. 82.25/30 is firm support on further dips. 82.66 was the US low.

GBP/USD was steady in US trade, supported by the rebounding euro, edging toward the top of recent 1.5350/1.5650 ranges. We close at 1.5570.