Rate drops further on follow-on selling; fails to hold early gains on very light volumes. Nothing really happening; some cross trading likely but not a lot of chatter about sterling crosses overnight. Traders report some reserve-manager buying on the dips but also offers capping.

Rate is two-way in sympathy with EURO. Possible buying from semi-official names so watch the news. 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.

GBP/USD Daily

Resistance 3:  1.9850
Resistance 2:  1.9820/30
Resistance 1:  1.9780
Latest New York: 1.9672
Support 1:  1.9650/60
Support 2:  1.9620/30
Support 3:  1.9600

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

Tentative GBP Halifax HPI m/m
4:30am GBP Manufacturing Production m/m
4:30am GBP Services PMI
4:30am GBP Industrial Production m/m
7:01pm GBP Nationwide Consumer Confidence
7:01pm GBP NIESR GDP Estimate

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