Will GBP/USD Finally Close Below Critical Level?
05/13/2010 12:01 am EST
Price action on GBP/USD, a daily chart of which is shown, has been unable to make a daily close below key support in the 1.4800 price region for more than a year. This is despite several attempts to move below that level for the past several trading days.
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(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; chart patterns in white; 50-period simple moving average in light blue.)
The technical bias on this currency pair continues to be bearish in line with the current prevailing downtrend. A key event to watch for would be a strong breakdown below the noted 1.5000 price region, in which case price could potentially target significant downside support in the 1.4800 price region, which represents the level of the previous long-term double-bottom low.
By James Chen, chief technical strategist, FXSolutions.com