Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Chart of the Day - 10/07/2009 – GBP/USD

(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.)

10/07/2009 – GBP/USD – Price action on GBP/USD, a daily chart of which is shown, has continued in its relatively tight consolidation with a bearish bias after breaking down below a rough, expanded head & shoulders pattern. The current consolidation can also be seen as a rough inverted flag/pennant formation. The key downside support level to watch for is the important 1.5800 price region, which the pair has essentially respected since May. Any significant breakdown below this level could confirm a potential bearish reversal off the head & shoulders pattern, and target further support in the 1.5500 price region, and possibly further down around the 1.5300 price region. Upside resistance within the context of the current bearishness in this pair resides around the 1.6100 price region, which represents the top of the current consolidation.

James Chen, CMT
Chief Technical Strategist
FX Solutions

IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors.