Wednesday May 14, 2008 - 20:56:13 GMT
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Chart of the Day - 5/14/2008 - GBP/USD
(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend line in green; downtrend lines in red; chart pattern in yellow; 200-period simple moving average in light blue.)
5/14/2008 â€“ GBP/USD â€“ With the dollar-strengthening plummet that has occurred in the past couple of days on the GBP/USD daily chart, as shown, price action has tentatively formed a large descending triangle pattern (represented on the chart by the yellow lines). Support at the bottom line of this triangle, which corresponds to the double/triple bottom that formed earlier this year, is holding steady as of this writing. But this descending triangle has bearish overtones, as it can be considered a continuation of the recent downtrend that began after the multi-decade peak was hit in November 2007. With near-term dollar-strengthening becoming an increasingly likely scenario, any momentum-based breakdown of the current triangle could present a possible opportunity to short the pair. In the event of this breakdown of the 1.9350 support region, further major support can be found around the significant historical support/resistance level at 1.9150.
Chief Technical Analyst
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