(Chart courtesy of FX Solutions' FX AccuCharts. 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.)
3/17/2009 € GBP/USD € Price action on GBP/USD, a daily chart of which is shown, has continued its traverse along an important parallel downtrend channel that began in late October. Within the context of this channel, price has recently been adhering to the top border of the channel within a smaller downtrend channel of similar slope. Earlier this week, price respected the shared top of both channels by bouncing down off the top border. In the event of a breakdown of the short uptrend line within the context of the smaller channel, the resulting bearish momentum could drop price down significantly, potentially targeting major support around 1.3500. Conversely, in the event of a substantial breakout above the shared top of both channels, a further major resistance target to the upside resides around the 1.4600 price region.
James Chen, CMT
Chief Technical Strategist
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