(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; 200-period simple moving average in light blue.)

8/21/2008 – GBP/USD – Price action on GBP/USD (a daily chart of which is shown), appears to have respected and bounced up off the long-term uptrend line (represented on the chart by the long green line), after a week-long period of consolidation right at the line. This bounce hints at a potential correction after the plummet that has occurred within the last several weeks. Oscillators like the displayed Stochastics, which are pointing unmistakably up from extremely oversold, lend some strength to the technical bias towards an upward correction. In the event that a major correction occurs in the near future, key resistance to the upside resides around the 1.9150 region. Support, on the other hand, should continue to reside at or near the long-term uptrend line.

James Chen

Chief Technical Analyst

FX Solutions

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