Rate remains inside buying wick from yesterday; following EURO lower. Strong sell signal active and aggressive traders can sell the rate on any strength. Bids around the 1.9660 area from “large names” cushioning the break; rally clears a lot of weak shorts as the week starts.

Traders expect GBP to track EURO this week. Traders now expect a top to form as the rate had thinner volume on the rally into the reported option defense last week and overnight. Rate fails at high prints near previous resistance so a correction is still developing.

Spillover weakness/strength from EURO still likely all week this week.  Continue to expect a lot of cross-trading. G-8 data may create some whipsaw again.  

GBP/USD Daily

Resistance 3:  1.9900
Resistance 2:  1.9850
Resistance 1:  1.9820/30
Latest New York: 1.9694
Support 1:  1.9650/60
Support 2:  1.9600
Support 3:  1.9550

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

4:30am GBP Trade Balance
5:30am GBP BRC Shop Price Index y/y

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