Daily Chart Art – December 13, 2011

EUR/USD: 4-hour

EUR/USD 4-hour Chart

Support alert! Support alert! Those of you who were able to short EUR/USD when it tested the falling trend line must be neck-deep in pips now! But you may want to consider trimming your short position or even going long soon. The pair is inching closer and closer to the 1.3150 minor psychological handle, a level that hasn’t been touched since early in October. Seeing as the pair has already fallen about 250 pips since it last met the falling trend line, a pullback may be in the works. Just remember to be smart about your risk management if you decide to buy up EUR/USD, homies! After all, this is a countertrend play.

USD/CAD: Daily

USD/CAD Daily Chart

USD/CAD has been bouncin’ around like a lowrider on hydraulics yo! And in the process, it has formed a pretty sweet symmetrical triangle on its daily chart. Right now, price is right smack in the middle of the said triangle, so you have plenty of time to wait for this pair to hit critical levels. The way I see it, you can either play a bounce off the top or bottom of the triangle, or you can wait for a breakout. To help you with your decision, I suggest you check out this cheat sheet on Japanese candlesticks.

GBP/JPY: 1-hour

GBP/JPY 1-hour Chart

Rounding up our trio of setups for the day is GBP/JPY with a descending channel. As you can see, this baby has been trending down in recent days, and it’s starting to look like we’re gonna get another prime opportunity to short it! If you’re feeling bearish for the pair, wait for it to reach the top of the channel and look to exit in the area of the previous low. But keep in mind, there’s also a chance that the pair may break out to the upside, so stay alert for bullish signs, such as a bullish marubozu, as well.

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.