Rate follows-on lower on stops under the 1.4050 area in size, cross-spreaders selling the GBP side of the spreads. Buy point around 1.4000 area in my view. Reversal off weekly highs a negative technical; is it a bear trap? Likely an upside rally is still in the works but the rate needs to hold the 1.4000 area with some confidence early this week.

Middle East names likely on the bid on this dip but no confirm yet. Traders report stops in-range adding for two-way action. Long-term tech resistance now at 1.5000 area likely to cap near term but stops are building above and the
1.5000 handle is a big psychological number.

23 year lows are very likely to hold on any break with initial support now at 1.3900 in play. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Short squeeze may be on hold.

GBP/USD Daily

• Resistance 3: 1.4440
• Resistance 2: 1.4380
• Resistance 1: 1.4300/10
• Latest New York: 1.3780
• Support 1: 1.3740/50
• Support 2: 1.3700
• Support 3: 1.3650

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

• 4:30am GBP Manufacturing Production m/m
• 4:30am GBP Industrial Production m/m
• 7:01pm GBP NIESR GDP Estimate

Forex Analysis by Jason Alan Jankovsky at ForexPros.com. For more
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