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Chart of the Day - 8/28/2009 – EUR/GBP

(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)

8/28/2009 – EUR/GBP – After traversing up a dramatically steep parallel uptrend channel for the past week and a half, price action on EUR/GBP, a 4-hour chart of which is shown, has finally shown signs of a potential bullish exhaustion by making a tentative breakdown below the channel. This occurs after price hit a 12-week high of 0.8837 on Thursday. With continued bearishness on this breakdown, a clear initial support target to the downside resides around the 0.8700 price region. To the upside, a significant level to watch is the double-tested 0.8865 level, which, if broken convincingly, could continue the recent steep bullishness and potentially target further resistance around the key 0.9080 price region.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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