Daily Chart Art – August 13, 2012

GBP/USD: Daily

GBP/USD Daily Chart

Look what we have here! You can still see the higher lows that I pointed out on the 4-hour timeframe of Cable last Friday if you zoom out to the daily chart. And you know what else is apparent on the higher timeframe? The pair is approaching a major resistance area around 1.5730. I wonder if resistance would hold or if GBP/USD will continue trading higher. For those who plan on shorting the pound soon, be on your toes not only for reversal candles but Stochastic as well. Note that it has indicated overbought conditions each time the pair tapped the resistance level.

GBP/JPY:4-hour

GBP/JPY 4-hour Chart

GBP/JPY is sporting a spankin’ sexy setup too! On the 4-hour timeframe, we see that a symmetrical triangle has actually materialized with the pair making lower highs and higher lows. The School of Pipsology has taught us that this consolidation pattern signals that price would soon break out, so brace yourselves! A strong close above 123.00 could mean that the pair is on its way back up to 125.00. Meanwhile, a bearish candle below 122.00 may hint that GBP/JPY would soon trade below 121.00.

EUR/JPY: 4-hour

EUR/JPY 4-hour Chart

If you’re a Fibonacci fan boy (or girl), then you’d certainly like this setup on EUR/JPY. On the 4-hour timeframe we can see that price is now testing the 61.8% Fib level which coincides nicely with the rising trend line. To make it even more enticing for the euro bulls, a bullish divergence has materialized with Stochastic making lower lows while price is making higher lows. Could this mean that the pair would soon skyrocket back up to 97.50? Maybe. But be careful! A close below Friday’s low around 95.70 could mean that EUR/JPY is on its way down to 95.00.

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.