Forexpros.com GBP/USD

Resistance 3: 1.9780

Resistance 2: 1.9720

Resistance 1: 1.9680

Latest New York: 1.9660

Support 1: 1.9600/1.9590

Support 2: 1.9550

Support 3: 1.9520

Comments

Long wick suggests bid pressure for two-way action coming, rumors of official demand lift rate off the lows around the 1.9590 area; failure to put on weight above the 1.9700 area suggests rate will consolidate lower. Lots of potential for day traders the next 24-48 hours as the rate is likely to stay range bound ahead of US data later in the week. Fundamentals still suggest a lower GBP and the failure to extend gains above the 1.9850 area so soon after Friday’s reversal argue for a continued downside after a bounce is possible. Continue to expect a lot of sympathy trade with EURO; the cross-spreaders are having a field day with the Sterling crosses and I think the GBP may track EURO near-term. Need a close below the 100 bar MA to build argument for the short but volatility is higher so expect a rally back to test the breakdown, expect continued whipsaw.

Not a lot to do but wait in my view.

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

Tentative GBP Halifax House Price Index m/m -1.1%

4:30am GBP Construction PMI 45.7

7:01pm GBP Consumer Confidence Index 68

Analysis by: Forexpros.com written by Jason Alan Jankovsky

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