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July 24, 2008 – GBP/USD Daily Chart

July 24, 2008 at 9:40 am • Posted in General

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(Price on 1st pane, Slow Stochastics on 2nd pane; downtrend line in red; uptrend lines in green; horizontal support/resistance line in yellow; 50-period simple moving average in light blue.)

7/24/2008 – GBP/USD – As of this writing, price action on the GBP/USD daily chart, as shown, has just reached down and touched the bottom support line of a short-term parallel uptrend channel (in green). Currently, price has stalled and consolidated near this support level. It should be noted that this uptrend channel is very steep, and therefore may likely be broken to the downside at some point in the near future. Whether that occurs on this swing or a future downswing is the question. There has also been very clear bearish price-oscillator divergence on the prior two swing highs. In the event of a true impending breakdown of this uptrend channel, major support to the downside resides around the 1.9650 region. Below this level, further support resides around the long-term downtrend line (in red) that extends from the multi-decade highs. A clear bounce off the current uptrend support line, on the other hand, should target resistance once again near the top of the parallel trend channel.

James Chen

Chief Technical Analyst, FX Solutions

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