Tuesday September 16, 2008 - 15:19:54 GMT
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Chart of the Day - 9/16/2008 - EUR/GBP
(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend line in green; 50-period simple moving average in light blue.)
9/16/2008 â€“ EUR/GBP â€“ Price on the key EUR/GBP cross (a daily chart of which is shown) has just made a pronounced bounce almost precisely off the significant uptrend support line that has been in place for at least a year now. This line is represented on the chart by the green line. From a technical perspective, this dip (or corrective pullback) to the uptrend line might have been expected, especially after price over-extended itself by hitting a decade-long historical high (around 0.8185) just a couple of weeks ago. Any continued upmove off the current trendline bounce should once again target strong resistance at this historical high. Oscillators like the displayed Stochastics, which are beginning to turn up from extremely oversold, are lending some potential strength to a bullish outlook on the bounce. A near-term turn and subsequent breakdown of the trendline, on the other hand, should target immediate further support around the 0.7800 region, which is the level of the last swing low pullback to the uptrend line.
Chief Technical Analyst
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