Bill Baruch, president and founder of Blue Line Futures, reviews and previews the euro, Japanese yen...
Trading Ideas on the GBP/USD Daily Chart
02/09/2010 12:01 am EST
Price action on GBP/USD, a daily chart of which is shown, has finally begun to show a bearish emergence from the sideways consolidation that has characterized this currency pair on a long-term basis for several months now.
(Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend lines in green; downtrend lines in red; 50-period simple moving average in light blue.)
A clean breakdown below the 1.5700 support region last Friday represented a tentative breakdown below the consolidation, in line with a medium-term downtrend that has been in place since mid-November 2009. In the process of this breakdown last Friday, the pair has established a new eight-month low near the bottom of the noted medium-term parallel downtrend channel.
The current bearishness appears likely to extend to the current week. A further downside support target resides in the 1.5350 price region, with yet further support for the move down around 1.5200, which represents the 161.8% Fibonacci extension of the bearish price run from the 1.6875 high (11/16/2009) to the 1.5830 low (12/30/2009).
Tentative upside resistance for any bullish correction within the context of the current downtrend resides first around the noted 1.5700 support/resistance price region, and then further up around the 1.5850 price region.
By James Chen, chief technical strategist, FXSolutions.com
Related Articles on FOREX
When bonds and stocks both rally along with commodities, markets have no fear. This was true for Eur...
Renowned investor and Columbus Business School Faculty member Jim Rogers has been cautioning investo...
Emerging Markets are bouncing today with Turkish lira (TRY) and South African rand (ZAR) both up ove...