(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; horizontal support/resistance levels in yellow; uptrend line in green; downtrend line in red; chart patterns in magenta; Fibonacci retracements in grey; 50-period simple moving average in light blue.)
1/21/2009 – EUR/GBP – Price action on the EUR/GBP (a daily chart of which is shown) has traveled up a straight and relatively accurate uptrend support line since late October 2008. The last bounce off this line occurred late last week, where price poked tentatively below the line (re-visiting a key 61.8% Fibonacci retracement level in the process) but ended up closing well above the trendline. From there, the current bullish run commenced, thereby continuing the uptrend momentum and now potentially targeting the triple-tested record high around 0.9800. This lofty level represents extreme and ultimate resistance for the pair, as there is no precedent above it. Intermediate resistance resides in the 0.9550 region. Oscillators like the displayed Stochastics are showing bullish price momentum, as they are emerging up from oversold. To the downside, in the event of any bearish retracement, price should meet strong support right around the uptrend support line, which currently resides just above the highly significant 0.9000 level.
Chief Technical Strategist
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