Daily Chart Art – December 16, 2011

GBP/USD: Daily

GBP/USD Daily Chart

Anybody feelin’ bullish for the pound today? If you are, check out this setup I found on the daily timeframe of GBP/USD! As you can see on the chart, I highlighted a potential double bottom chart pattern. If you’ve gone through the School of Pipsology, you probably know that this is considered a bullish chart pattern. And to make the pair even more appealing to all bulls out there is the bullish divergence that Stochastic is sporting. Sweet, right?? But be careful. Don’t go loco buying GBP/USD. Who knows, there may still be a lot of bears in the market that could push the pair below 1.5400!

USD/CAD: 1-hour

USD/CAD 1-hour Chart

Now, let’s take a look at USD/CAD on the 1-hour chart. Using the Fibonacci retracement tool, it seems like the Loonie’s run will soon come to an end with the pair already testing support at the 50% level. On top of that, a bullish divergence has also materialized with price making higher lows while Stochastic is making lower lows. Watch out for bullish candlesticks around the support area as they could signal that the pair is on its way back above 1.0400. On the other hand, a strong bearish candle that closes below yesterday’s low at 1.0320 could mean that USD/CAD will trade lower, possibly even slipping below the 1.0300 handle.

EUR/GBP: Daily

EUR/GBP Daily Chart

Lastly, here’s EUR/GBP for y’all! On the daily timeframe, we see that yesterday’s candle closed as a doji at the bottom of the descending channel. Some of you who know your Japanese candlesticks are probably already getting excited to buy the pair and see it rally all the way back up to the top of the channel at .8600. And of course, the oversold Stochastic is only making the pair an even more appealing long. However, it might be better to wait for a bullish candlestick to close above .8400 for confirmation. If the pair closes below support at the bottom of the channel, we could see it tumble all the way down to .8300!

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.