Tuesday December 9, 2008 - 17:54:07 GMT
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Chart of the Day - 12/09/2008 - GBP/USD
(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; downtrend lines in red; horizontal support/resistance level in yellow; 50-period simple moving average in light blue.)
12/09/2008 â€“ GBP/USD â€“ Languishing near 6-year lows, GBP/USD (a daily chart of which is shown) is currently adhering closely to a significant downtrend resistance line. After having just tested, tentatively breaking, and then retreating just last week from the prior 6-year low reached in mid-November, this pair appears poised to make yet another potential run towards the lows. Volatility has been diminishing significantly within the last week or so as price action has been confined to converging borders (resembling a descending triangle formation). Much like other major pairs that are currently entrenched in converging consolidations, this pair seems to be coiling up in preparation for an aggressive directional push. The potential trigger for a short-selling opportunity would be a strong break and close below the recent low extremes (around the 1.4460-1.4500 zone). For long opportunities, the potential trigger would be a strong break and close above the downtrend resistance line. In this event, further resistance to the upside resides around the 1.5500 region, a breakout above which could confirm a potential double-bottom reversal.
Chief Technical Strategist
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