Daily Chart Art – August 14, 2012

USD/JPY: 1-hour

USD/JPY Hourly Chart

First up on today’s roster is USD/JPY just rangin’ like a Power Ranger. It seems that the pair has been stuck in a consolidation since last week. Do you think we’ll see a breakout today? I wouldn’t jump to that conclusion just yet. I’m expecting the pair to test resistance at the top of the range around 78.70. If it manages to close strongly above the level, then maybe it could mean that USD/JPY is on its way back up to 80.00. However, reversal candlesticks around the area may signal that there are still enough bears in the market to push the pair below 78.00.

EUR/GBP:4-hour

EUR/GBP 4-hour Chart

Who’s up for a Fib setup? If you are, then you’ll defo find EUR/GBP sexy! On the 4-hour timeframe, we see that the pair is approaching the trend line on which price previously found support. Oh and whaddaya know?! Using the Fibonacci retracement tool, we also see that the trend line coincides nicely with the 38.2% Fib level. Keep tabs on the .7880 area! Reversal candlesticks around the level could mean that the pair would soon drop back down to .7750. Meanwhile, a strong close above the trend line may hint that we could soon see EUR/GBP trade around .7950.

EUR/AUD: 4-hour

EUR/AUD 4-hour Chart

Last but certainly not the least, here’s EUR/AUD sportin’ what looks like a double bottom. Graduates of the School of Pipsology know that this chart pattern is usually taken as a sign for an impending reversal. But don’t get excited about buying the pair all the way to 1.2100 just yet! Stochastic already indicates that EUR/AUD is overbought. So, it might be a good idea to wait for price to react to the neckline before pulling the trigger. Who knows, EUR/AUD may resume its downward move and tap a new low below 1.1600.

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.