Daily Chart Art – January 21, 2011

USD/CAD: Daily

USD/CAD Daily Chart

What’s goin’ down, forex bros? I’ll tell you what… It’s USD/CAD! It looks like the pair’s downtrend is still very much intact since that falling trend line on the daily chart is holding. The pair pulled back from its nosedive to the .9850 area and retraced to that support turned resistance near the psychological 1.0000 handle. Now, that’s a lot of zeros right there! On top of that, there’s also a nice shooting star that formed on the 50% Fibonacci retracement level, signaling that price could shoot down as well. However, stochastic is still making its way up to the overbought area, which means that buyers still have enough juice in them. They could keep pushing the pair higher, possibly until the 61.8% retracement level or beyond!

GBP/USD: Daily

GBP/USD Daily Chart

Will you look at that? It looks like those reversal candles I pointed out on the 4-hour chart were there for a reason! After testing the 1.6000 psychological handle, GBP/USD dropped like a hot potato, falling about 150 pips. If you whip out the daily chart, you’ll get a better idea why! This level has acted as a significant resistance level in the past, and Stochastic has just crossed over in overbought territory. The next major support level isn’t until 1.5400, so it seems like there’s still time for you to jump aboard the bear bandwagon!

AUD/USD: 4-hour

AUD/USD 4-hour Chart

Hold your horses, Aussie bears! There’s an obstacle in your path! The area of .9840 seems to be getting in the way of Aussie bears. If you look back, you’ll see this isn’t the first time this has happened. Has the drop really come to an end? According to Stochastic, the pair is already oversold and should be turning up soon. But be careful because the very long red candlestick that recently formed seems to be signaling a lot of bearishness. Sellers may continue to pile in and push the pair to new lows below .9800. Whatever you decide to do, just be sure to practice smart risk management!