Daily Chart Art – August 1, 2012

EUR/USD: Daily

EUR/USD Daily Chart

Will EUR/USD’s downtrend resume anytime soon? The daily time frame reveals that the longer-term falling trend line is still intact, but it looks like the pair is ready to test the resistance. Take note that the former support area around 1.2400 is right between the 50% and 61.8% Fibonacci retracement levels, which could hold and force EUR/USD to head back south. Stochastic hasn’t quite reached the overbought zone yet, which means that euro bulls could still take this baby higher.

EUR/JPY: 4-hour

EUR/JPY 4-hour Chart

Heads up! EUR/JPY seems poised to test the neckline of the double bottom formation on its 4-hour time frame. Coincidentally, the neckline is just a few pips below the 61.8% Fibonacci retracement level, which could act as strong support for the pair. Stochastic still seems to be heading towards the oversold region, suggesting that EUR/JPY could keep edging down. If the downward momentum is strong enough to make the pair break the 61.8% Fib and neckline, EUR/JPY could be headed for support just above the 94.00 handle.

USD/CAD: 1-hour

USD/CAD 1-hour Chart

It looks like Loonie bulls needed to pause for a break as USD/CAD is currently pulling up from its dive. This potential retracement could carry on until the 38.2% Fib level, which is just a few pips above the former support around 1.0075. At the same time, stochastic is pointing upwards and heading for the overbought territory, which means that USD/CAD has enough room to move higher. Make sure you wait for stochastic to turn if you plan to take a short trade on this one!

Before you get carried away with all these chart patterns, remember that technical analysis is only half the story.

To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.

Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.

  • Prabakar V

    Thanks for tips…………

  • Yaseen Abdul R Khan

    Went long on the USDCAD @ 1.0053, TP just below the 0.382 fib line at 1.0083… got a good 30 pips :).. Let’s see if it gets resistance at the 0.382 line and turns back around.