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Chart of the Day - 9/16/2008 - EUR/GBP
9/16/2008 – EUR/GBP – Price on the key EUR/GBP cross (a daily chart of which is shown) has just made a pronounced bounce almost precisely off the significant uptrend support line that has been in place for at least a year now. This line is represented on the chart by the green line. From a technical perspective, this dip (or corrective pullback) to the uptrend line might have been expected, especially after price over-extended itself by hitting a decade-long historical high (around 0.8185) just a couple of weeks ago. Any continued upmove off the current trendline bounce should once again target strong resistance at this historical high. Oscillators like the displayed Stochastics, which are beginning to turn up from extremely oversold, are lending some potential strength to a bullish outlook on the bounce. A near-term turn and subsequent breakdown of the trendline, on the other hand, should target immediate further support around the 0.7800 region, which is the level of the last swing low pullback to the uptrend line. James Chen Chief Technical Analyst FX Solutions IMPORTANT NOTICE: These comments are for information purposes only. The information contained on this document does not constitute a solicitation to buy or sell by FX Solutions, LLC., and/or its affiliates, and is not to be available to individuals in a jurisdiction where such availability would be contrary to local regulation or law. Opinions, market data, and recommendations are subject to change at any time. Forex trading involves substantial risk of loss and is not suitable for all investors. (Chart courtesy of FX Solutions' FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend line in green; 50-period simple moving average in light blue.)