Douglas Low

Attached above is a daily chart of the GBPUSD. Since end of May 2009 all the way till date, it can be seen that the GBPUSD has been moving in a range within a pretty distinctive channel. On 31/12/2009 and 04/01/2010 the GBPUSD has made a high of 1.6235 and 1.6239 respectively. Both trended near the 200SMA but was unable to break it. A possible breakout MAY occur if the GBPUSD continues moving bearishly. Else those who are trading based on daily charts may want to take note of the price level 1.5888 as GBPUSD may rebound back to the price of 1.6676

The EURUSD as shown above is also in a similar predicament as the GBPUSD. For the past several days, the EURUSD has been ‘hitting’ the boundaries of the 200SMA but unsuccessful to break through. It is also observed that the EURUSD is trending tightly at the price level of 1.4327 with neither the bulls nor the bears taking the lead.

Probably what is required now, is a critical news announcement of the USD that may send both GBPUSD and EURUSD to break through either the 200SMA or their respective support lines.