Daily Chart Art – August 29, 2011

EUR/USD: 4-hour

EUR/USD 4-hour Chart

Is it time for EUR/USD to break out? The pair has been making higher lows and finding resistance at the 1.4500 handle, forming an ascending triangle on its 4-hour chart. The pair just hit resistance again while stochastic is almost in the overbought zone, suggesting that euro bears are about to pounce soon. But if bulls refuse to let up, we might just see an upside breakout above 1.4500. Take a peek at the Chart Patterns Cheat Sheet to figure out how to play this setup.

USD/CHF: Daily

USD/CHF Daily Chart

Aha! That long-term falling trend line on USD/CHF’s daily chart is still intact! Will it continue to hold? Stochastic, which is already deeply overbought, suggests that the pair’s rally is over. If the trend line holds, it could push the pair back to its former lows around the .7300 area. But if we see a strong breakout, the pair could go all the way up to the next resistance area around .8500. Make sure you read up on the School of Pipsology‘s lesson on spotting breakouts before you trade this pair.

GBP/JPY: 4-hour

GBP/JPY 1-hour Chart

What’s next for the guppy? After breaking below that strong support around 125.75, could it be headed all the way down? The pair made a nice pullback to that broken support area, which could hold as resistance now. In fact, that level lines up with the 61.8% Fibonacci retracement level! Stochastic is still climbing, which means that pound bulls have enough energy to push the pair higher. But if the 61.8% Fib refuses to give way, GBP/JPY could fall back to the 124.50 area.

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!