Daily Chart Art – December 14, 2010

GBP/USD: 4-hour

GBP/USD Chart

Is the remote broken, cause it seems that Cable is stuck on a channel! Ha, bad joke, but the 4-hour chart of GBP/USD does show a sweet setup. The pair has been trading with an ascending channel for some time now. Notice the shooting star that has formed at the top of the channel. With Stochastic about to crossover from overbought conditions, are sellers about to jump in and push price all the way down to the bottom? Keep an eye out for a candle close above the high of the shooting star though, as this would be a sign that the pair is breaking out to the top.

EUR/USD: 4-hour

EUR/USD Chart

Yo! Get dibs on my update on on EUR/USD! As you can see, the pair finally broke above the trend line after flirting with it for quite a while. Sweet! If there’s enough euro lovin’ to go around and we see a strong break above 1.3400, it’s not hard to imagine that the pair could end up back at 1.3757. On the other hand, Stochastic is indicating that the pair is already overbought. Could it be that the euro’s rally yesterday was nothing more than just a retracement? If it is, don’t be surprised to see EUR/USD fall to 1.3000 again!

EUR/GBP: 4-hour

EUR/GBP Chart

And now let’s check out EUR/GBP. Is it just my brand new, schnazy Ray Ban fogging up or is that a pair of double bottoms I see? Hmmm, it just might be! But I think it would be wise to wait for the pair to convincingly break above the neckline resistance at .8500 before we start rooting for the buyers. However, if you’re in the bear camp, then that hidden bearish divergence indicated by Stochastic making higher highs and price making lower highs, should be awesome news for you as this could be a sign that EUR/GBP is on its way back down to .8350!