EUR/GBP Bearish Correction In Steep Uptrend

Price action on EUR/GBP, a daily chart of which is shown, has made a minor bearish correction within a steep overall uptrend. This occurs after price hit an approximate 6-month high around 0.9300 with a clear shooting star candle (a bearish indication) earlier in the week. As of Wednesday (9/30/2009), the bearish retracement has descended down to a strong support/resistance level in the 0.9075 price region before bouncing back up. The current steep uptrend has been in place since the August lows. Any substantial breakdown below the noted 0.9075 region could threaten this uptrend and hint at a potential trend reversal off the shooting star formation. If, however, price is able to breakout above the 0.9300 high, confirming an uptrend continuation in the process, the key upside resistance target clearly resides around the 0.9500 resistance region.

(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; 50-period simple moving average in light blue.)

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