(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.)
5/19/2009 € GBP/USD € After breaking out above key resistance in the 1.5300 price region yesterday, GBP/USD, a daily chart of which is shown, has followed through to hit a high above 1.5500, effectively breaking the choppy sideways consolidation that has prevailed in this pair for the last couple of weeks. The question now is whether or not this bullishness will continue to prevail, or if price will fall back into consolidation. Strong downside support now resides around the broken 1.5300 resistance. The upside target on the current rally resides just above the 1.5700 price region, which currently resides around a key uptrend line that was broken down in mid-April, but which should now act as dynamic resistance.
James Chen, CMT
Chief Technical Strategist
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