Rate whipsaws hard, both sides get hurt as stops cleared first to the upside and then to the downside putting the 23 year lows in sight. Reversal off weekly highs a negative technical; Likely an upside rally is still in the works but the rate needs to rebound hard to wash-out the shorts again.

After today’s action I think both sides will take a break. Traders report stops in-range adding for two-way action. Long-term tech resistance now at 1.5000 area likely to cap near term but stops are building above and the 1.5000 handle is a big psychological number.

23 year lows are very likely to hold on any break with long-term support at 1.3500 area now in play. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Short squeeze may be on hold.

GBP/USD Daily

• Resistance 3: 1.4250
• Resistance 2: 1.4220
• Resistance 1: 1.4150
• Latest New York: 1.3740
• Support 1: 1.3650/60
• Support 2: 1.3600/10
• Support 3: 1.3500/10

Data due Wednesday: All times EASTERN (-4 GMT)

• 5:30am GBP Trade Balance

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