Big drop in sympathy with EURO, negates hook reversal and stops drive trade. Finishes better than the open so there is some bid interest coming in. 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. EURO dropping forced rate into stops traders agree. So far 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: 1.8391
Support 1:  1.8320
Support 2:  1.8290/1.8300
Support 3:  1.8250

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

NONE

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