Despite massive sell-off the rate holds above Sept. lows and appears to be heavily over-sold. Follow-on selling likely to attract short-covering around the double-bottom lows for Sept. US news started the move no doubt but traders say light volumes may be exaggerating the move.

Aggressive traders can buy this dip; look for a recovery back to the 1.8600 handle near term. Two-way action likely near-term; heavy focus on bailout plan. Possible sovereign interest on the dip as semi-officials seen on dips in both EURO and GBP recently.

Some stops triggered along with active selling by model accounts traders say. Major support has held for two weeks now, any weakness likely to be bought hard. Profit-taking bids continue as well. OK to buy any time in my view.

GBP/USD Daily

Resistance 3:  1.8180
Resistance 2:  1.8050
Resistance 1:  1.7880
Latest New York: 1.7716
Support 1:  1.7630
Support 2:  1.7580
Support 3:  1.7550

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

2:00am GBP Nationwide HPI m/m
4:30am GBP BOE Credit Conditions Survey
4:30am GBP Construction PMI

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