EUR/GBP Bearishness Till Support At 0.8650

Strongly bearish price action on EUR/GBP, a daily chart of which is shown, has descended all the way down to a key support level around 0.8650 as of Wednesday (5/27/2009) morning. This major support resistance level has served as an important pivot region on at least two separate occasions in the past. Generally, price action on this currency pair is following an established downtrend line extending from the re-test of 0.9500 in mid-March. The directional bias on this pair continues to be bearish. Any significant breakdown of the current 0.8650 support should meet immediate further support in the 0.8570 price region, another key support/resistance level. Any break below that could eventually target yet further support in the 0.8340 price region. Upside resistance within the context of the current downtrend resides around the key 0.8800 level, with key dynamic resistance around the mentioned downtrend resistance line.

(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.)

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