Daily Chart Art – August 18, 2011

GBP/USD: 4-hour

EUR/USD 4-hour Chart

Did you catch the huge move up by Cable yesterday? If you didn’t, don’t worry, as it looks like Cable still has room to go up! Well, I did, and it looks like there’s more to come! As you can see from the 4-hour chart, the pair has managed to break major resistance at 1.6500 convincingly. Since the pair has been consistently making “higher highs” and “higher lows,” the bulls seem to be in complete control of the pair. If you’re bullish on Cable, look to possibly buy Cable once it retests broken resistance at 1.6500. Be careful though, as the Stochastic shows that the pair is heavily overbought!

AUD/USD: Daily

AUD/USD Daily Chart

Is AUD/USD running out of steam? Even if the Stochastic has yet to reach overbought conditions, It’s a definite possibility since the pair is currently at 1.0500, a major psychological number, a 50% Fibonacci retracement level, and a potential support-turned-resistance area. If you’re looking to sell the pair, wait for bearish reversal confirmation candlesticks such as dojis and bearish engulfing candles before jumping in!

USD/JPY: 1-hour

USD/JPY 1-hour Chart

Breakout! Yesterday, USD/JPY was able to bust out of its symmetrical triangle formation and test former lows around the 76.50 area. With the Stochastic at overbought territory and price about to retest the broken rising trend line, we could see the pair head lower again.

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!

1 comment

  1. Craig Jacques-Carr

    Thanks for sharing the charts above! With the European markets being in the RED this morning, would that place bearish pressure on the GBP/USD in additional to the over bought technicals?

    Reply

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