Daily Chart Art – February 9, 2011

GBP/JPY: Daily

GBP/JPY Chart

Yesterday I gave you a look at the 4-hour chart of GBP/JPY, but as we point out in our School of Pipsology, one should always take into account multi time frame analysis! So for today, let’s take a step back and take a look at the daily chart! The pair seems to be trading within a descending channel. With price now at the top of the channel and bearish divergence forming, is it time to short this sucker? Watch out though, because as I pointed out yesterday, a rising wedge seems to be forming! If we see a bullish marubozu candle close above channel, it could be a sign of more bullish power!

EUR/JPY: 1-hour

EUR/JPY Chart

Who’s feelin’ bullish for the euro? This setup might just be right up your alley! As you can see, EUR/JPY has risen above its falling trend line, but right now, it seems like it’s on its way back down to test it. Will the trend line act as support or will price ultimately fall back down below it? Aye, there’s the rub! Before you act, you may want to wait for tell-tale candlesticks to form. A bearish marubozu that closes below the trend line might signal further losses for the euro, while reversal candlesticks such as hammers could indicate that the pair is ready to bounce higher.

USD/CHF: Daily

EUR/JPY Chart

Can you dig this trend line breakout?! I sure can! USD/CHF recently broke above its descending trend line, and now it looks poised to forge new highs. Stochastic seems supportive of the idea as well. It’s indicating upward momentum but is still a distance away from overbought territory. If the pair continues to rise, its next destination might be in the area of the previous high, around .9800. But should this rally turn out to be a dud, USD/CHF could be headed back to .9350.