Forex Trading Technical Analysis (2010/08/24) GBP/JPY Breaks Down Wedge, Targets Downtrend Continuation
(Please click on the forex chart thumbnail to enlarge)
8/24/2010 Forex Trading Technical Analysis (FXpath.com) – GBP/JPY (a daily chart of which is shown) as of Tuesday (8/24/2010) has broken down cleanly below a rising wedge pattern and, in the process, several key support levels. Directly underneath the wedge pattern, price went on to break down below 132.00 support and then the key psychological 130.00 level, reaching a low around 128.75 before pulling back up on its bearish run. This occurs within the context of a long-term parallel downtrend channel extending back to the August 2009 high. In the event that price furthers its bearish trend momentum to break below the 128.75 low, a key downside support target resides around the long-term 126.70 low just hit in May. Any strong breakdown below that level would confirm a downtrend continuation. In terms of key long-term technical support in the event of a breakdown below that level, price would not be too far off from the all-time low at 118.80 hit in January 2009.
(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.)
James Chen, CTA, CMT (bio)
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