Daily Chart Art – December 8, 2011

EUR/GBP: 4-hour

EUR/GBP 4-hour Chart

Will EUR/GBP stay inside its 150-pip range today? The pair has been bouncing between support near .8500 and resistance around .8650 for almost an entire month, as the bottom of the range held like a boss yesterday. That long-wicked candle suggests that euro bulls refuse to let the pair dip any lower and the potential bullish divergence could mean that EUR/GBP is ready to climb back to the top of the range. But before you take any trades, make sure you check if the setup meets the 9 Rules for Trading Divergences first!

EUR/JPY: 4-hour

EUR/JPY 4-hour Chart

Check out the head and shoulders pattern forming on EUR/JPY’s 4-hour chart! With the pair inching close to its neckline around the 104.00 handle, we just might see a breakdown today. According to the School of Pipsology lesson on how to trade chart patterns, the breakout could be roughly the same size as that of the formation, which is around 150 pips in this case. If you plan to trade this setup, better review the lesson on trading breakouts as well.

EUR/USD: 4-hour

EUR/USD 4-hour Chart

Last but not least, here’s a neat symmetrical triangle formation on the 4-hour time frame of EUR/USD. Price action is looking tight as euro bulls and bears continue to battle it out. It’s tough to tell which camp will emerge victorious since stochastic is neither in the overbought nor oversold region. Anything can happen, so make sure you set those stops right if you’re gonna play this setup.

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.

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