Only pair to fall to a new low but volumes light on the move suggesting overshoot. Rally back in sympathy with EURO. Overnight volumes better traders say; cross-spreaders active in Sterling and EURO suggesting that the USD will be pressured for both pairs near-term.

Drop is drawing profit-taking bids suggesting the bottom is finally finding a low print. Overdue for a short-covering rally. Likely an exhaustion dip and the rate will recover soon.

Look for a bottom the next 48 hours. OK to stand aside but I want to wait just a bit before buying. So far, two-way trade is suggesting GBP is overextended. Close back above the 1.8580 area argues for further gains; aggressive traders can buy the close but again I would wait just a bit. Stop-driven break is likely a head fake in my view.

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:  1.8650
Resistance 2:  1.8600
Resistance 1:  1.8530
Latest New York: 1.8349
Support 1:  1.8280/90
Support 2:  1.8250
Support 3:  1.8220

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

2:00am GBP Nationwide HPI m/m
6:00am GBP CBI Distributive Trades Realized
7:01pm GBP GfK Consumer Confidence

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