Rate drops into support around 1.3840/50 triggering close-in stops under 1.3940 area; rallies on Fed news but can't significantly break 1.4250 yet. Likely that will come overnight. Dip is a head fake now that rate held 1.3980 into the close. Stops still seen above weekly highs around the 1.4250 area. Lows likely remain secure.

The volume needs to come up and I think the shorts have yet to bail as a group; that may be starting in earnest now. 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 1.4400 and the 1.5000 handle is a big psychological number. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Next upside target is 1.4400 area, downside is near support at 1.3780

GBP/USD Daily

Resistance 3: 1.4420
Resistance 2: 1.4350
Resistance 1: 1.4320
Latest New York: 1.4235
Support 1: 1.3860
Support 2: 1.3780
Support 3: 1.3720

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

5:30am GBP Public Sector Net Borrowing
5:30am GBP Prelim M4 Money Supply m/m
7:00am GBP CBI Industrial Order Expectations

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