2/27/2009 - GBP/USD - Currently in the midst of traversing a parallel downtrend channel, price action on the GBP/USD daily chart, as shown, has settled and consolidated right above a significant support/resistance zone in the 1.4050 region. This area is near the top of the downtrend channel. Within the context of the current overall downtrend, any substantial breakdown below this 1.4050 level would be a strong bearish signal, and could target a re-test of support in the 1.3500 region, the level of the recent long-term low. The top of the current downtrend channel should continue to serve as dynamic resistance for the pair in the near-term.
Chief Technical Analyst
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(Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend lines in red; horizontal support/resistance lines in yellow; 200-period simple moving average in light blue.)