Tuesday November 25, 2008 - 17:25:53 GMT
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Chart of the Day - 11/25/2008 - GBP/USD
(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; chart patterns in yellow; 50-period simple moving average in light blue.)
11/25/2008 â€“ GBP/USD â€“ The current consolidation on the GBP/USD daily chart, as shown, has taken the form of a tentative inverted flag formation. Price is currently near the top border of the flag in a correction off recent multi-year lows. If a close significantly above the top border of the flag occurs (around the 1.5400 region), the flagâ€™s customary role as a continuation pattern will have been invalidated. A subsequent bounce down off the top border of the flag, on the other hand, could presage an ultimate break to the downside of the flag, which would continue the long-term downtrend and target the 1.4550 region, which is the level of the multi-year low. The current bar has stalled around a key 38.2% Fibonacci retracement level (the high-to-low retracement span being measured from the swing high on 10/30/2008 to the multi-year low on 11/13/2008). Therefore, any strong break and close above the 1.5400 region would be a significant feat that could represent a major upside correction and possible trend reversal.
Chief Technical Strategist
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