GBP/USD (a 4-hour chart of which is shown) as of Wednesday (11/17/2010) has retraced back down to and tentatively bounced up off a key uptrend support line extending back to the early September low. This uptrend line has been touched at least three times prior to yesterday’s and today’s tentative bounce. The corrective descent down to this trendline follows a breakdown confluence below: a steeper uptrend support line extending back to the late October low, a triangle pattern, and the key 1.6000 psychological level. In the event that the current uptrend support line is subsequently broken strongly to the downside, a significant support target resides around the 1.5650 price region. To the upside, in the event of further momentum off the trendline bounce, initial upside resistance resides around the mentioned 1.6000 level, followed by the 1.6180 price region.
(Forex chart key: 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; Fibonacci levels in grey and light blue.)