Cross-spreaders on the sell side of the sterling pairs kept the rate under pressure overnight; rate firm against USD in two-way action. Stops noted on the move back through the 1.5800 area on the way higher with offers mixed in; resistance at 1.6000 likely to cap near-term.

UK PPI data was weaker but not as bad as expected; likely more bad news also due this week which will pressure calls for another BOE rate cut next month. Traders note unwinding of Yen cross-spreads driving a lot of trade after the open. Traders note liquidity is only moderate and still on the lower side. Aggressive traders can look to buy the next dip. Expect more whippy action. Two-way action likely to continue.

GBP/USD Daily

Resistance 3: 1.6320/30
Resistance 2: 1.6250
Resistance 1: 1.6100/10
Latest New York: 1.5795
Support 1: 1.5520/30
Support 2: 1.5500
Support 3: 1.5420

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

4:30am GBP Trade Balance
4:30am GBP DCLG HPI y/y

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