Chart of the Day - 3/15/2010 – GBP/USD

3/15/2010 – GBP/USD – Bearish price action on GBP/USD, a daily chart of which is shown, as of Monday (3/15/2010) morning New York session, has erased much of the gains that the pair made late last week. On Friday after having reached 1.5200 resistance, which represented the upper border of an inverted pennant formation that was broken to the downside earlier in the week, price was rejected at that level in the beginning of this trading week, and now potentially appears poised to continue its bearish momentum. In the event of a continuation of the current bearishness, a key downside support target resides in the 1.4780 price region which represents the bottom of the noted pennant pattern and a 10-month low that was hit just two weeks ago. Any further breakdown below that long-term low should confirm a continuation of the steep accelerated downtrend that has prevailed in this pair since the beginning of the year. Upside resistance within the context of this steep downtrend currently continues to reside in the noted 1.5200 price region.
 

James Chen, CMT
Chief Technical Strategist
FX Solutions
 

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(Chart courtesy of FX Solutions' FX AccuCharts. 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.)