Late rally shows solid bids coming in, rate holding above the lows and inside previous large wick. Bids expected during the day as shorts cover. Late highs driven by stops and some active buying; late shorts likely to roll stops close-in. Look for more upside this week. Rate bouncing off two-year lows and is an excellent buy in my view.

Rate has likely flushed out every long now and shorts will likely take gains soon leaving the rate vulnerable to a sharp rally. Offers above the market mixed with stops from late shorts so be ready for whipsaw the next few days. Traders expect GBP to track EURO through this week.

Continue to expect a lot of cross-trading. Get ready for the rally.

GBP/USD Daily

Resistance 3:  1.8750
Resistance 2:  1.8700/10
Resistance 1:  1.8680
Latest New York: 1.8618
Support 1:  1.8520/30
Support 2:  1.8500
Support 3:  1.8480

Data due Thursday: All times EASTERN (-5 GMT)

4:30am GBP Retail Sales m/m
4:30am GBP Prelim Business Investment q/q

Forex Analysis by Jason Alan Jankovsky at ForexPros.com. For more details about Forex Trading and Tips for decent earnings through Forex Trading, Please check http://www.forexpros.com