(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend line in green; downtrend lines in red; Fibonacci retracement levels in grey; 50-period simple moving average in light blue.)
5/07/2008 – EUR/GBP – The EUR/GBP daily chart, as shown, has been following a nicely-angled uptrend since the last quarter of 2007. Support for this uptrend is represented on the chart by the long, green line. The 50-period SMA (in light blue) has also acted as rather reliable support since this uptrend began in September 2007. Within the context of this trend, price action has been marked by breakouts above short-term downtrend resistance lines (in red). Current price action appears to be no different. After bouncing up off the long-term uptrend support line late last week, which also coincided with a bounce up off a key 50% Fibonacci retracement level, price has once again approached the latest short-term downtrend resistance line. In the event of a breakout to the upside, clear resistance resides in the region of the long-term top around 0.8100. An impending move back up after what appears to be a simple retracement in the larger uptrend is also supported by oscillators like the displayed Stochastics, which are pointing way up after recently emerging from severely oversold.
Chief Technical Analyst
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