Rate is two-way on the way down to trade under support around the 1.7300 area; volumes better and traders note large names on the bid possibly covering shorts. Rate is likely heavily over-sold. Follow-on selling likely to attract short-covering on further weakness. Follow-on selling likely from technical's and spillover from EURO. Aggressive traders can buy this dip around the 1.7380 area; look for a recovery back to the 1.8000 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; traders note profit-taking bids. Major support has held for two weeks now, any weakness likely to be bought hard. OK to buy any time in my view. Let price orders work near-term.

GBP/USD Daily

Resistance 3:  1.8180
Resistance 2:  1.8050
Resistance 1:  1.7880
Latest New York: 1.7493
Support 1:  1.7310/20
Support 2:  1.7280

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

Tentative GBP Halifax HPI m/m
5:30am GBP BRC Shop Price Index y/y
10:30am GBP CB Leading Index m/m

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