The Pound dropped on Monday, from the very same area which stopped it on Sep 1st, the all important resistance 1.5480/90, and this drop reached 1.5295 yesterday. Then, the price jumped for more than 100 pips so far. This bounce or short term uptrend found a supporting trend lien which is currently at 1.5374. We expect the Dollar to try and break this level, to continue its rebound from the gigantic resistance 1.5490. If it manages to do so, we will be in for another episode of the drop series, similar to what we have seen on Monday. This will target 1.5262 at the very least, and at a later time 1.5151. On the other hand, the most important resistance is 1.5441. We do not exaggerate when we say that this level is the single most important one in determining the short term direction. If broken, the Pound will refuse to give up to our negative outlook, and will break free, targeting the interesting areas above 1.55, most interesting of them in our eyes are 1.5507 & 1.5596.

Support:

• 1.5374: the rising trend line from yesterday’s low on intraday charts.

• 1.5262: Jul 5th high.

• 1.5151: the rising trend line from Friday’s low on intraday charts.

Resistance:

• 1.5441: the top of the rising trend channel on the hourly chart.

• 1.5507: Aug 19th low.

• 1.5596: Aug 16th low.