Daily Chart Art – February 7, 2012

EUR/USD: 1-hour

EUR/USD 1-hour Chart

Our first setup for the day is this sweet little range on EUR/USD – the same one that Pipcrawler is trading! Right now, price is right smack in the middle of the range, so it’s hard to tell if we’ll see a test of support or resistance. If you think EUR/USD will remain range-bound, there are two ways you can play this: you can either short in the area of 1.3200, or go long at around 1.3050.

USD/JPY: 4-hour

USD/JPY 4-hour Chart

First it was acting as support, now it’s serving as resistance! I’m talking about the 76.65 level on USD/JPY, homies! If the pair manages to break above this line, it could end up scoring a touchdown by rallying even higher. But touchdowns don’t come easy – just ask the New England Patriots! The pair looks like it’s having a hard time crossing this level at the moment, and as you can see, Stochastic just crossed over after barely reaching the overbought region. This could be an early sign that the pair will make its way back down to 76.00.

GBP/USD: 1-hour

GBP/USD 1-hour Chart

Price is making lower highs while Stochastic is making higher highs? That’s a bearish divergence, baby! Could GBP/USD be on the verge of breaking down? Price tested the 1.5850 handle a couple times, and both attempts ended in failure. If you feel like rooting for the dollar, you may want to consider shorting at market or in the area of 1.5850. But if you feel that the pound’s bullish momentum will carry it higher, you may want to wait until we see a solid close above this resistance 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.

  • Hari

    Thank you, I agree with your comment