[B]Today's Forex Market Overview[/B]

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The dollar is gaining against the euro and pound on Monday as global stock markets fall in a renewal of the quest for shelter against risk.

EURUSD break below USD1.3890 triggers stops and allows rate to extend easing to USD1.3885 into early European trading. The break below USD1.3894 (76.4% of the rally from USD1.3806 to USD1.4178) will add to the current bearish tone with technical traders looking for a deeper move toward that recent low at USD1.3806. Interim support noted at USD1.3855/50 ahead of USD1.3810/00.

Sterling proving more resilient versus dollar demand into early Europe provides cable with buoyancy while euro-dollar remains soft and allows euro-sterling to squeeze down to stg0.8505. Cable bids seen placed from USD1.6320 to USD1.6310, more toward USD1.6290 with stops below. Resistance seen placed at USD1.6380/85.

Analysts described the local session as uneventful, as traders await fresh direction from the European and U.S. markets ahead of the Reserve Bank of Australia's monthly policy meeting minutes Tuesday. Currency traders will be looking for the RBA to expand on whether a further rate cut remains an option for policy makers, especially given moves by one major retail bank to hike its mortgage rates citing higher funding costs.

European stocks are expected to open marginally lower Monday, with commodity stocks set to weigh on the market as the week starts.

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