Rally higher overnight helped by stronger EURO and UK retail sales data turned back after light stops triggered in the 1.8720 area; EX reversal today from the toolbox suggest the bottom is in. Traders note that volumes are modest and shorts caught wrong-footed overnight. Close above the 1.8720 area argues for further gains; aggressive traders can get ready to add to open longs. Look for more upside this week. Shorts will likely take gains now that the 1.8700 handle has traded again this week. Stop-driven rally today likely will have a pull-back and if on light volume you want to add. Offers above the market mixed with stops from late shorts so be ready for whipsaw the next few days. Traders expect GBP to track EURO through this week. Continue to expect a lot of cross-trading. Get ready for the rally.
Data due Friday: All times EASTERN (-5 GMT)
4:30am GBP Revised GDP q/q
4:30am GBP Index of Services 3m/3m
GBP/USD Daily
Resistance 3: 1.8850
Resistance 2: 1.8820
Resistance 1: 1.8780
Latest New York: 1.8770
Support 1: 1.8600
Support 2: 1.8550
Support 3: 1.8520/30