Long wick suggests bid pressure for two-way action coming, rumors of official demand lift rate off the lows around the 1.9590 area; failure to put on weight above the 1.9700 area suggests rate will consolidate lower. Lots of potential for day traders the next 24-48 hours as the rate is likely to stay range bound ahead of US data later in the week.

Fundamentals still suggest a lower GBP and the failure to extend gains above the 1.9850 area so soon after Friday’s reversal argue for a continued downside after a bounce is possible. 

Continue to expect a lot of sympathy trade with EURO; the cross-spreaders are having a field day with the Sterling crosses and I think the GBP may track EURO near-term. Need a close below the 100 bar MA to build argument for the short but volatility is higher so expect a rally back to test the breakdown, expect continued whipsaw.

Not a lot to do but wait in my view.

GBP/USD Daily

Resistance 3:  1.9780
Resistance 2:  1.9720
Resistance 1:  1.9680
Latest New York: 1.9660
Support 1:  1.9600/1.9590
Support 2:  1.9550
Support 3:  1.9520

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

Tentative GBP Halifax House Price Index m/m -1.1%
4:30am GBP Construction PMI 45.7
7:01pm GBP Consumer Confidence Index 68

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