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| GBP/USD Drops to Long-Term Trendline Support Posted: 15 Jun 2011 10:47 AM PDT  GBP/USD (daily chart) as of Wednesday (6/15/2011) has dropped significantly down to hit a key long-term uptrend support line extending back to the May 2010 lows. This occurs after price action respected a short-term downtrend resistance line extending back to the late April high. Currently, bearish momentum is strong and has reached a critical juncture. A breakdown below the long-term trendline has a key downside target around the psychologically important 1.6000 support/resistance level. To the upside, the important 1.6300 price level should now act as key resistance within the context of the current bearishness.
(Click on chart to enlarge. Forex chart key: price on 1st pane, Stochastics 14,3,3 on 2nd pane; horizontal support/resistance levels in black; uptrend lines in green; downtrend lines in red; 50-period simple moving average (SMA) in orange; 100-period SMA in brown; 200-period SMA in dark blue; Fibonacci levels in magenta.) James Chen, CTA, CMT
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