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Chart of the Day - 5/14/2008 - GBP/USD
5/14/2008 – GBP/USD – With the dollar-strengthening plummet that has occurred in the past couple of days on the GBP/USD daily chart, as shown, price action has tentatively formed a large descending triangle pattern (represented on the chart by the yellow lines). Support at the bottom line of this triangle, which corresponds to the double/triple bottom that formed earlier this year, is holding steady as of this writing. But this descending triangle has bearish overtones, as it can be considered a continuation of the recent downtrend that began after the multi-decade peak was hit in November 2007. With near-term dollar-strengthening becoming an increasingly likely scenario, any momentum-based breakdown of the current triangle could present a possible opportunity to short the pair. In the event of this breakdown of the 1.9350 support region, further major support can be found around the significant historical support/resistance level at 1.9150. 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; downtrend lines in red; chart pattern in yellow; 200-period simple moving average in light blue.)
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