Daily Chart Art – August 22, 2011

GBP/USD: 1-hour

GBP/USD 1-hour Chart

Is that GBP/USD trading below the falling trend line and the 1.6500 major psychological level I see? Why, yes it is! If you’re looking to short the pair, this could be your chance as the pair just broke a very significant trend line support. Be careful though, as the Stochastic has just fallen to the oversold territory! With the breakout not very convincing, it may be best to wait for a candlestick confirmation!

EUR/USD: 4-hour

EUR/USD 4-hour Chart

Chart pattern lovers, pay attention! Last week, EUR/USD managed to find resistance at the top of the symmetrical triangle formation and the 1.4500 major psychological level. That being said, it looks like the pair is starting to make its way slowly down. If 1.4400 holds as minor resistance, we may see price fall back to and retest the bottom of the triangle.

USD/JPY: Daily

USD/JPY Daily Chart

Have the USD/JPY bears finally run out of steam? It sure looks like it because the last few candlesticks on the pair’s dialy charts were spinning tops. Spinning tops are important Japanese candlestick formations since they give us an early signal that price may soon reverse. If you think that the pair’s move down is exhausted and the Stochastic is correct in saying that the pair is oversold, you could take your chances and go long on the pair and catch at least small bounce.

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!

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