May 3 – EUR/GBP – Slightly bullish consolidation
(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.)
5/03/2010 – EUR/GBP – Price action on EUR/GBP, a daily chart of which is shown, has consolidated within a slightly bullish consolidation that has taken the form of an inverted flag pattern.
This occurs within the context of a clear downtrend extending from a mid-March high, and after price broke down below a confluence of two different uptrend support lines. The current flag consolidation also occurs after bearish price action dropped down to key support around the important 0.8600 price region.
If the current inverted flag fulfills its common role as a continuation pattern, a breakdown below the pattern (which would be around the noted 0.8600 support level) would confirm a downtrend continuation and potentially begin targeting further downside support around 0.8400.
