Daily Chart Art – February 14, 2012

USD/JPY: Daily

USD/JPY Daily Chart

Who’s feelin’ bullish for the yen? If you are, then this setup on the daily chart of USD/JPY may just tickle your fancy! The pair has formed a couple of dojis just below the falling trend line. On top of that, a bearish divergence has also materialized with price making lower highs while Stochastic is making higher highs! If there is enough yen lovin’ in the markets in the following trading days, we may just see USD/JPY tumble down to the support area around 76.50. But take caution trading the pair! A strong break above the trend line, around 78.00, could signal that USD/JPY is on its way back up to 79.00.

EUR/JPY: 4-hour

EUR/JPY 4-hour Chart

If you believe in the saying, “The trend is your friend,” then this Fib play on EUR/JPY may just be for you. Using the Fibonnacci retracement tool, we see that the pair could stall at the 38.2% level which coincides with the previous resistance at 102.00. If support at the major psychological handle does hold, we could see EUR/JPY make a new high around 103.50. However, don’t get too excited putting long orders just yet. It’s noteworthy to point out that Stochastic is not yet oversold which could mean that the pair can still drop to 101.00. And so, waiting for reversal candlesticks to materialize around the area might be a good idea before pulling the trigger.

GBP/USD: 4-hour

GBP/USD 4-hour Chart

Finally, here’s GBP/USD sportin’ what looks like a head and shoulders chart pattern on the 4-hour time frame. If you’re a graduate of the School of Pipsology, then you’re a cool cat who probably knows that the pattern is usually taken as a bearish signal. Now, it looks like price is already testing support at the neckline. If it does break, we could see GBP/USD fall to around 1.5600. If it doesn’t and we see a reversal candle materialize at the support area, the pair could rally back up to 1.5900.

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.