(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; chart patterns in white; 50-period simple moving average in light blue.)
6/25/2010 – GBP/USD – Price action on GBP/USD, a daily chart of which is shown, has stalled in its bullish correction just around the key 1.5000 price region. This resistance area also coincides with a key downtrend resistance trendline extending from the November 2009 high. While GBP/USD has been bullish for several weeks now, the pair can still be considered to be entrenched within a longer-term overall downtrend. Any strong breakout above 1.5000, however, would raise doubt as to the continued viability of this downtrend. In the event that there is a significant breakout above 1.5000, a key upside resistance target resides in the 1.5350 price region. To the downside, if the current resistance confluence is respected, any strong breakdown and close below the significant 1.4800 support would be a substantially bearish indication that could potentially prompt the pair to begin targeting the long-term lows once again, continuing the overall downtrend.
James Chen, CMT
Chief Technical Strategist
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.