(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.)
7/01/2009 € EUR/GBP € Price action on EUR/GBP, a daily chart of which is shown, has been consolidating in a triangle formation as it has retraced back up to a key downtrend resistance line extending from the 0.9500 double-top high in mid-March. Still currently entrenched in a strong downtrend, this pair has some key directional events to watch for as price action unfolds. The top of the triangle currently coincides with the noted downtrend resistance line. A strong breakout above both of these technical factors would be a substantially bullish indication that should target further immediate resistance in the 0.8650 and then 0.8720 price regions. If price ultimately respects the current general downtrend, the key event to watch for would be a breakdown below the triangle, in which case price could easily target strong support in the 0.8200 price region.
James Chen, CMT
Chief Technical Strategist
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