(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; downtrend lines in red; chart patterns in magenta; 50-period simple moving average in light blue.)
1/16/2009 – GBP/USD – Price action for at least the past half year on the GBP/USD (a daily chart of which is shown) has been characterized by relatively large chart pattern breaks. Currently, price is continuing within a prolonged descending wedge pattern consolidation that has been in place for the last three months. The past couple of days have seen the pair rise moderately within this wedge formation, targeting resistance at the top border of the wedge. At the current juncture, the dynamic resistance offered by the top wedge border resides around the 1.5150 region. Any strong breakout above wedge resistance would lend considerable strength to the view that a base has been formed and a potential bullish trend-reversal could be in the making. In the event of this breakout, further key resistance above resides in the region of 1.5350.
Chief Technical Strategist
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