Daily Chart Art – August 6, 2012

GBP/USD: 4-hour

GBP/USD 4-hour Chart

It’s aliiiiiive! I’m talkin’ ’bout the range on the 4-hour chart of GBP/USD, of course! After finding support at the bottom of the range at 1.5500 last Friday, the pair turned up and climbed 150 pips without stopping. At this pace, it’s on track to revisit the top of the range, which has been a solid resistance level for almost two months now. Think it’ll hold again? Wait for reversal patterns to form in this key area of interest!

USD/CAD: Daily

USD/CAD Daily Chart

Loonie bulls have been flexin’ their muscles for quite some time now, but it seems as though they can’t get USD/CAD to budge past parity. This level also happens to line up really well with the bottom of a falling channel, which could explain why the pair is encountering tough support. A break below 1.0000 could see price fall back down to .9900. On the other hand, if parity holds, I wouldn’t be surprised to see price touch the top of the falling channel again!

EUR/JPY: 4-hour

EUR/GBP 4-hour Chart

Last but not least, we have what looks like a double bottom on EUR/JPY! As we learned from the School of Pipsology, double bottoms (or J-Los as I like to call ‘em) tend to precede strong bullish moves when their necklines are broken. That being said, a case can be made for another strong rally on EUR/JPY. Since the height of the double bottom formation is about 200 pips, the pair’s next stop could be 200 pips above the neckline at around 99.00.

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.