Friday June 20, 2008 - 14:25:48 GMT
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Chart of the Day - 6/20/2008 - GBP/USD
(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; downtrend line in red; horizontal support/resistance level in yellow; 200-period simple moving average in light blue.)
6/20/2008 â€“ GBP/USD â€“ Price action on the GBP/USD pair, the 4-hour chart of which is shown, has just bumped up against a key downtrend resistance line. Although this line has only been touched two previous times, it connects the 27-year high reached in November 2007 to a major intermediate swing-high hit in March of this year. Therefore it is a relatively significant dynamic level. The first technical expectation at or near any significant support/resistance level is for price to respect the level by bouncing off of it instead of breaking out of it. Therefore, barring any fundamentally-driven breakout, the prevailing technical bias at this juncture is for an impending turn, or at least a consolidation, at or near this resistance. Oscillators like the displayed Stochastics are lending strength to this bearish outlook, as they are in extremely overbought territory and are beginning to turn down. In the event of an impending move back down, a major support level to the downside resides around the 1.9600 region, a significant previous support/resistance level.
Chief Technical Analyst
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