Rate two-way and recovers after a marginal new low into support overnight. 23 year lows in sight but the rate is attracting bids. Reversal off weekly lows a positive technical but the volume needs to come up and I think the shorts have yet to bail as a group.

Likely an upside rally is still in the works but the rate needs to rebound hard to wash-out the shorts again. After yesterday'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 back on the board I think.

GBP/USD Daily

• Resistance 3: 1.4050
• Resistance 2: 1.4000
• Resistance 1: 1.3920
• Latest New York: 1.3885
• Support 1: 1.3650/60
• Support 2: 1.3600/10
• Support 3: 1.3500/10

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

• 5:30am GBP Consumer Inflation Expectations
• 6:00am GBP CB Leading Index m/m
• 2:30pm GBP MPC Member Barker Speaks

Forex Analysis by Jason Alan Jankovsky at ForexPros.com. For more
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