Daily Chart Art – December 15, 2011

EUR/USD: Daily

EUR/USD Daily Chart

A few days ago, Forex Gump asked “Will EUR/USD Test its 2011 Low?” and the answer seems to be a resounding “Heck yeah!” as of the moment. With the pair inching closer and closer to the 1.2875 area, the next question is: Will we see a bounce or a break? Stochastic is already in the oversold region, suggesting that euro bears are getting exhausted. However, the oscillator hasn’t crossed just yet, which means that there could still be enough selling pressure left. Whether you’re going for a bounce or waiting for a break, make sure to set those stops properly!

GBP/JPY: 4-hour

GBP/JPY 4-hour Chart

As I have mentioned in a previous post, GBP/JPY has been trading within a relatively tight falling channel. Now that price is testing the lower boundary of the channel, it appears that we could see a retracement soon. Price held wonderfully and the Stochastic is pointing up and moving out of oversold territory. If you’ve been riding the downtrend, consider covering at least part of your position already as we could see price head to the top of the channel again.

EUR/AUD: 4-hour

EUR/AUD 4-hour Chart

My, my, my! Is a double bottom chart pattern I see on the 4-hour timeframe of EUR/AUD? If you’ve graduated from the School of Pipsology, then you’re a cool cat who probably knows that this is widely considered a bullish pattern. So, if there are enough bulls in the market, we may just see the pair rally back up the charts! Don’t get too excited joining the bull camp just yet though. Take note that Stochastic is already in the overbought area, hinting that the pair could soon tumble back down to the major support level at 1.3000.

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.