width=398(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.)

4/01/2010 - GBP/USD - Price action on GBP/USD, a daily chart of which is shown, has displayed five consecutive days of significantly bullish price bars following the double-test bounce off support just below 1.4800 late last week. In the process of this bullishness, price currently appears to be targeting resistance around the peak of the potential double-bottom formation, which resides in the 1.5380 price region. A strong breakout above that peak would confirm the double-bottom formation (a classic reversal pattern) and could indicate a potential change (or reversal) in the overall downtrend. A breakout above the double-bottom peak could target further initial resistance to the upside around the 1.5550 price region. To the downside, strong support resides around the key psychological 1.5000 area.

James Chen, CMT
Chief Technical Strategist
FX Solutions

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