Stopped out of longs overnight, rate holding above the lows and showing another large wick. Late highs driven by stops and some active buying; late shorts likely to roll stops close-in.

Look for more upside this week. Possibly short covering ahead of the news due Tuesday; some of that may have contributed to the one-figure rally off the lows overnight. Rate bouncing off two-year lows and is an excellent buy in my view.

Rate has likely flushed out every long now and shorts will likely take gains soon leaving the rate vulnerable to a sharp rally. Possible buying from semi-official names (Russians) so watch the news.

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. Get ready for the rally.

GBP/USD Daily

Resistance 3:  1.8750
Resistance 2:  1.8700/10
Resistance 1:  1.8680
Latest New York: 1.8675
Support 1:  1.8520/30
Support 2:  1.8400
Support 3:  1.8370

Data due Wednesday: All times EASTERN (-5 GMT)

4:30am GBP MPC Meeting Minutes
4:30am GBP M4 Money Supply m/m
4:30am GBP Public Sector Net Borrowing
6:00am GBP CBI Industrial Trends Orders

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