Forex Chart Of The Day: EUR/GBP

(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.)

The EUR/GBP cross, a daily chart of which is shown, has descended in the past week all the way down to an important uptrend support line extending from the late October low just below 0.7700. This key trendline has been touched and respected at least four times since its inception. Monday’s daily bar has poked tentatively through the trendline in its continuing bearishness from last week.

In the event of a substantial breakdown and close below this trendline, price could target further support levels around 0.8850 and then 0.8650. Conversely, if price ultimately respects the current trendline with a clear bounce, the 0.9500 region represents a strong medium-term resistance target to the upside.

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