Volatility decreases a bit as today is another inside range day but trading higher. Traders note stops and unwinding of cross-spreads supporting the rate. Follow-on selling finds bids at prior low. Bounce off the lows yesterday and today leaves a healthy bid wick suggesting some upside coming soon but volatility is still high. Traders note liquidity is still thin. Rate at new support level but ranges appears wider.

Traders note quality bids on the dip suggesting a bottom is in here somewhere but buyers have been stepping up for 1000 points now; many likely sidelined.  Aggressive traders can buy anytime but expect more whippy action. Two-way action likely to continue.

Confirmed sovereign interest on the dip last night as semi-officials seen on dips in both EURO and GBP recently; lately middle-east names. Traders report cross-spreading for Sterling crosses likely driving the rate near-term.

GBP/USD Daily

Resistance 3:  ?
Resistance 2:  ?
Resistance 1:  1.6330
Latest New York: 1.5859
Support 1:  1.5400
Support 2:  1.5250
Support 3:  ?

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

5:30am GBP Net Lending to Individuals m/m
5:30am GBP Mortgage Approvals
2:00pm GBP MPC Member Blanchflower Speaks

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