Daily Chart Art – August 20, 2012

EUR/USD: 4-hour

EUR/USD 4-hour Chart

Watch out, we have a potential breakout setup over here! The euro bulls are finding trouble making new highs on EUR/USD‘s 4-hour chart, but it also looks like the 1.2250 area is holding as a strong support. Will the bulls and bears have a showdown soon? Read up on trading breakouts if you’re plannin’ on trading this one!

NZD/USD: Daily

NZD/USD Daily Chart

NZD/USD spent more than two weeks erasing most of its gains, but was the move just a major retracement? The daily chart suggests so, as the pair has just bounced off the 38.2% Fib. What makes this setup more interesting is that the 38.2% Fib lines up nicely with a former broken resistance. Remember, whenever price passes through a resistance level, that level normally becomes support. Stochastic also indicates that the pair is almost oversold, which could mean that it could move higher soon.

AUD/USD: 4-hour

AUD/USD 4-hour Chart

Aww, snap! Is that a break I see? It would seem that price has already traded below support at the neckline of the head and shoulders pattern on the 4-hour time frame. But with Stochastic already in the oversold territory, it looks like the bear rally is losing steam. I’d watch out for the area around 1.0460 if I were you. It looks like the pair could pull back to the 38.2% Fibonacci retracement level and test the neckline for resistance. If there are enough sellers in the area, we could see AUD/USD slip below 1.0400. However, a strong upside break could mean that the pair is on its way back up to 1.0600.

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.

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