(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; chart patterns in white; Fibonacci retracements in grey; 50-period simple moving average in light blue.)
4/09/2009 € GBP/USD € Price action on GBP/USD, as shown on the accompanying 4-hour chart, has consolidated into a relatively tight triangle formation. This occurs after price retreated from major resistance just below the 1.5 price region, which was tested twice since the beginning of the year. In the event of any bearish breakdown below the bottom border of the triangle, which currently coincides approximately with a key short-term support level around 1.4630, a strong dynamic support target further to the downside resides around the uptrend support line extending from the 3/11/2009 low. Currently, the slope of this trendline resides around the 1.4400 region. Any breakout to the upside above the top horizontal border of the triangle, which currently resides at the triple-tested 1.4775 level, could potentially mean that price could target a subsequent retest of the mentioned resistance just below 1.5.
James Chen, CMT
Chief Technical Strategist
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