Resistance 3: 1.4440/50

Resistance 2: 1.4380

Resistance 1: 1.4350

Latest New York: 1.4348

Support 1: 1.4100/10

Support 2: 1.4050

Support 3: 1.4020

Rate rebounds after holding support on correction back to the 1.4100 area yesterday, stops seen in the rate over 1.4250 and 1.4300 with more likely layered above 1.4350/80 area. Rate ends near highs erasing toolbox signal; support is likely solid. Traders report more stops waiting under 1.4100 with bids around 1.4050 for the day but volatility not expected to be that high as the rate has a rather tight range so far and may be grinding higher. A close back under the 1.4250 area argues for more losses but support is solid around 1.4100 so aggressive traders can buy dips. Traders report large names on the dips last week but they may have been whipsawed out to start this week. Overhead resistance now drops to 1.4380 to 1.4440 area; overhead target of the 1.5000 area likely to be on hold with a test of the lows first possibly creating a range. Traders feel the 23-year lows will likely remain secure. The shorts have taken control of the market above the 1.4440 area for now and if a range is forming a test under the 1.3900 handle is likely; traders report stops in-range adding for two-way action.

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

1st-9th GBP Halifax HPI m/m

4:30am GBP Manufacturing PMI

4:30am GBP Housing Equity Withdrawal q/q

Forex Trading Analysis written by Jason Alan Jankovsky, featured by forexpros.com