Forex Technical Analysis – 2010-05-31 – GBP/USD Bullish Correction within Strong Bearishness
(Please click on chart thumbnail to enlarge. 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.)
5/31/2010 (FXpath.com) – Despite rising up to reach and slightly surpass 1.4600 resistance last week, GBP/USD (a daily chart of which is shown) continues to be entrenched within a strong bearish environment and steep downtrend. Last week’s noted bullish correction to 1.4600 came on the heels of price establishing strong support during the prior week around the 1.4230 price region. This level represented a fresh 13-month low for the pair. This week, if price action fails to extend its current bullish correction significantly above 1.4600, the key downside level to watch continues to be around the noted 1.4230 price region. A strong breakdown below that support area should target immediate further support in the 1.4100 price region. In the event of yet further downtrend bearishness below 1.4100, a key longer-term support target to the downside resides in the 1.3700 price region.
James Chen, CTA, CMT (bio)
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