The dollar profit-taking trend spurred from overbought daily charts continued into around 9:30 a.m. ET when PIMCO- Bill Gross made comments of a 4.5% Federal Funds rates. Combined with higher oil prices, and lower US equities, the dollar was sold and EUR/USD and GBP/USD bounced off their recent range lows. As much as I would like to play Sterling higher in here, I believe another weak-hand shake-out towards 1.9925 is in the cards ahead of this week's US Consumer Confidence, Housing data, and US and UK GDP Y/Y, Q/Q.

There was a significant Sterling daily high from January 23, at 1.9914 that spurred the big break higher towards the big 2.0. Should be we break through this morning's 1.9975 area lows, there is a very, very good shot we will retest this previous breakout zone. Adding to my confidence that we can pick up pounds on the cheap is a simple 1.0 projection pointing to trend channel support at around 1.9915. For tonight, I'm bidding for Sterling at 1.9922, 12, and 02 with 1.9978 area stops. Look to book partial profits and slide your stop to cost once this morning's New York area lows of 1.9975 is tested as resistance.

Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

Disclaimer
The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.