FXstreet.com (Barcelona): - The Sterling has dropped in Tuesday's Asian session from 1.4300, below 1.4200 to levels right above support levels at 1.4135/50.

Failing to remain above 1.4135 would put the Pound under selling pressure and open the doors for the 1.4060 support line reaching the lowest levels of the current month. Break of the aforementioned support would take the Pound down to 1.3917 first and then 1.3690.

Nicole Elliott, senior Technical Analyst at Mizuho Corporate Bank supports the idea of the Pound setting a bottom this week although some spike low is likely: Ducking below the headlines as Eastern Europe and the Euro take the brunt of the selling. Cable should try again this week to form an interim low, hopefully around retracement support but maybe we shall have to live through a nasty 'spike low'.