Technical Trading Tips and Techniques by 
(Please click on the accompanying charts to enlarge.)
As of Friday morning (New York session), Cable has made a downward correction of what was looking like the beginnings of an upward correction. Of the two accompanying charts, one is a daily chart while the other is an hourly.
The daily is showing that price has retraced virtually the entire bounce off the long-term uptrend support line that occurred yesterday. Currently, price is right back down around the trendline.
The hourly chart is showing price traverse between two relatively well-defined support/resistance levels since the steep drop that occurred in the first half of the month. The bottom of the range is around 1.8530, while the top is around 1.8790. A move back up, therefore, should target the top of the range once again.
A continued downmove, on the other hand, could potentially breakdown both the short-term range and the long-term uptrend line. In this event, slightly below the range is the 1.8500 region, which continues to be a significant support level to the immediate downside.
- James
James Chen is the Chief Technical Analyst at FX Solutions,
a leading Forex broker. He is also a registered Commodity Trading
Advisor (CTA) and a Chartered Market Technician (CMT) Level 3
candidate. At FX Solutions, Mr. Chen writes daily currency analysis,
conducts forex trading seminars, and has authored numerous articles on
currency trading and technical analysis for major financial
publications. His upcoming book, Essentials of Foreign Exchange Trading
(John Wiley & Sons), will be released in early 2009.