Rate is two-way on the way down to trade under support around the 1.7300 area; volumes lighter and traders note large names absent. Rate is likely heavily over-sold. Follow-on selling likely to attract short-covering on further weakness. Follow-on selling likely from technical’s and spillover from EURO.

Aggressive traders can buy this dip; look for a recovery back to the 1.8000 handle near term. Two-way action likely near-term; heavy focus on bailout plan. Possible sovereign interest on the dip as semi-officials seen on dips in both EURO and GBP recently. Some stops triggered along with active selling; traders note profit-taking bids.

Major support has held for two weeks now, any weakness likely to be bought hard. OK to buy any time in my view.

GBP/USD Daily

Resistance 3:  1.8180
Resistance 2:  1.8050
Resistance 1:  1.7880
Latest New York: 1.7433
Support 1:  1.7340
Support 2:  1.7280
Support 3:  1.7200

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

Tentative GBP Halifax HPI m/m
4:30am GBP Manufacturing Production m/m
4:30am GBP Industrial Production m/m
7:01pm GBP Nationwide Consumer Confidence