Daily Chart Art – February 10, 2012

GBP/USD: 4-hour

GBP/USD 4-hour Chart

While many of you were probably caught up in all the Linsanity that’s been taking over the NBA, you may have failed to notice that despite all the choppy trading we’ve seen on Cable this week, the pair has actually been trading within an ascending channel. Now that GBP/USD is approaching the bottom of the channel and the 1.5800 handle, could we see this pair rise like Jeremy Lin’s popularity? Take note that Stochastic is also entering oversold conditions, giving us an additional signal to go long. I’d wait for some candlestick confirmation before buying into the hype!

USD/CAD: 4-hour

GBP/USD 4-hour Chart

Next up is a potential break out play on the Loonie. The pair has now formed a descending triangle, finding resistance at a falling trend line and solid support at .9930. Now that Loonie trading is getting tighter and tighter, I’ve got a feeling this pair is gonna explode, just like my boys Kanye and Jay-Z’s latest music video – y’all know which one I’m talking about! I suggest waiting for a solid candlestick close either above the falling trendline or below .9930 before putting in your orders!

GBP/JPY: 4-hour

GBP/JPY 4-hour Chart

Is it the end of the line for Guppy? The pair has been on a solid tear this week, rising nearly 200 pips from its opening price. However, it looks like the GBP/JPY rally may be coming to an end. Bearish divergence has formed, as price has established new highs, but Stochastic is showing lower highs. Don’t be surprised if this pair heads all the way back down to the 121.50 level!

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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