Daily Chart Art – August 15, 2011

AUD/USD: 1-hour

AUD/USD 1-hour Chart

Ooh, is that an ascending triangle I’m seeing on AUD/USD’s 1-hour chart? Happy Pip might want to keep her chinky eyes glued to this pair because it could break out anytime soon! The only question is: Which way will it go? Stochastic is already in the overbought area, suggesting that Aussie bears could pounce. Don’t forget that the size of the breakout is more or less equal to the height of the formation, which is roughly 400 pips in this case.

EUR/USD: 4-hour

EUR/USD 4-hour Chart

Now here’s a setup Huck might find to her liking. There’s a symmetrical triangle forming on EUR/USD’s 4-hour chart and the pair seems ready to test the top of the formation. If that holds, the pair could fall back to the bottom of the triangle and continue to range. However, stochastic is still moving towards the overbought area, which suggests that euro bulls have enough energy to take the pair much higher. Watch out for a breakout above 1.4400 because it could be the start of an uptrend.

GBP/JPY: Daily

GBP/JPY Daily Chart

Of course, I’ve got something for the one-eyed forex monster Cyclopip, too! Here’s a possible longer-term retracement play on GBP/JPY. There’s a falling channel on its daily chart, but it seems that pound bears could use a break. Stochastic is moving out of the oversold area, suggesting that the pair could pull up, possibly until the top of the channel. If any of the Fib levels hold as resistance, GBP/JPY’s downtrend could resume.

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. Check him out, playas!