Follow-on selling surprises to the downside; stops cleared and orders thin. Traders note solid bids but offers remain. Rate at new support level but ranges appears wider. Drop under the 1.6500 handle finds light stops. Monthly lows give way as sentiment won't rally.

Traders note quality bids on the dip suggesting a bottom is in here somewhere. Aggressive traders can buy anytime but expect more whippy action. Follow-on selling likely from technical's but spillover strength from EURO likely to be better to end the week.

Look for a recovery back to the 1.8000 handle near term; 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. Traders report cross-spreading for Sterling crosses likely driving the rate near-term. Model accounts seen selling GBP and EURO overnight.

GBP/USD Daily

Resistance 3:  1.6800
Resistance 2:  1.6730
Resistance 1:  1.6500
Latest New York: 1.6234
Support 1:  1.6130
Support 2:  ?
Support 3:  ?

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

4:30am GBP Retail Sales m/m
4:30am GBP BBA Mortgage Approvals
Tentative GBP MPC Member Gieve 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