Daily Chart Art – December 6, 2010

EUR/USD: 4-hour

EUR/USD Chart

Alright folks, here’s the update on EUR/USD as I promised last week. As you can see, the pair has finally made its way to the falling trend line resistance and is currently currently consolidating there. Is this a breakout in the making or is this simply a fakeout? Hah, I don’t know either, so let’s see how price reacts in the next couple of hours to determine where the pair is headed. If you’re part of the bull camp, look for price to strongly close above the 1.3500 as confirmation that the trend has truly reversed. If you’re part of the bear camp, a daily close below 1.3300 is what you’re looking for!

GBP/USD: 4-hour

GBP/USD Chart

With GBP/USD just chillin’ at the 50.0% Fibonacci level and the Stochastic indicating that it is already overbought, it looks like traders may just go loco in shedding pounds today! If there are enough sellers to reprezent, the pair could tumble down to 1.5650. Don’t get too excited just yet though. Who knows, the bulls could charge GBP/USD back up to a previous support area at around 1.5856, and test resistance at the 61.8% Fib and the falling trend line.

EUR/GBP: 4-hour

EUR/GBP Chart

Whoa! I think I see a trend line break on EUR/GBP! But hold up… It seems like the buyers are already tired of struttin’ their stuff with Stochastic being in the overbought region already. Sticking some Fibs on the chart, we see that the pair could retrace some of its gains around the 38.2% and 50.0% Fib levels before it sprints back up. Keep tabs on that area because if EUR/GBP doesn’t find support there, sellers could drag it down to its previous low at around .8350.

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