by James ChenFX Solutions
8/13/2008 – GBP/USD – The deep and rapid plunge in price within the last two weeks on GBP/USD (a daily chart of which is shown), has brought the pair all the way down to the key long-term uptrend support line. This line (represented on the chart by the longest green line) has served as support for many years now. The plummet that has occurred and is occurring on the pair has closely approached this strong support, which currently resides around the 1.8600 level. Any break to the downside below the trendline should meet additional strong support around the 1.8500 region, which is a significant previous horizontal support/resistance level. A bounce at or near support, on the other hand, should first target the 1.8800 region as immediate resistance to the upside. Lending strength to a possible bounce are oscillators like the displayed Stochastics, which are indicating extremely oversold.
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