EUR/GBP Falls Below Critical Support
04/14/2009 9:56 am EST
(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.)
Price action on the key EUR/GBP cross had fallen all the way down to an important uptrend support line with at least five prior touches, extending from the late-October low just below 0.7700.
Currently right around the 0.9000 figure, price has indeed made a clear breakdown below this uptrend support line, potentially targeting the 0.8850 support/resistance price region with any continued bearishness.Any breakdown below 0.8850 could target further major support around 0.8650. To the upside, the 0.9100 region should serve as significant resistance, with the broken uptrend line now serving as further dynamic resistance to the upside.
By James Chen, Chief Technical Analyst, FX Solutions