Daily Chart Art – January 21, 2013

EUR/USD: 4-hour

EUR/USD 4-hour Chart

Remember that EUR/USD setup I pointed out last week? Well it looks like the double top is looking even more apparent now! The pair got rejected at the 1.3400 handle and is now trading around the neckline at 1.3300 which is where it previously found resistance. A strong break below the handle could mean that EUR/USD would soon trade around 1.3100, so watch out! If reversal candlesticks materialize though, we could see the pair rally past 1.3400.

USD/CAD: 4-hour

USD/CAD Daily Chart

Whoa! I spy a descending triangle on USD/CAD, y’all! On top of price testing the falling trend line, Stochastic also indicates overbought conditions. You diggin’ it? Don’t get too excited to see the pair drop to .9850 though. A strong close above .9950 could signal a strong rally past parity.

EUR/AUD: Daily

EUR/AUD Daily Chart

Oh, and whaddaya know! Here’s another triangle! This time, it’s on the daily chart of EUR/AUD. The pair has been making lower highs and higher lows, forming what looks like a symmetrical triangle. Will we see a breakout soon? Be on your toes for a strong break above 1.2750 as it could hint a rally all the way to 1.3000. If we don’t see a break though, the pair would probably test the bottom of the triangle soon.

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.

  • Fong YeeMui

    I refer to your comment on the EUR/USD. If you look at the daily chart, there was also a double top at the 1.31 level, YET it went on to hit 1.34! If you again look at the 4hr chart, there in fact were FOUR TOPs at the 1.33 level YET it went on to hit the 1.34 level ! So double TOPs means nothing to this pair! Just wondering, why you seldom alert readers here to any REVERSE double bottom as there are plenty.

    • Victor M. Herraez

      Technicals are technicals. No holy grail. This double top is a warning to a bull pair as EUR/USD has been for some time. But as he says, you must mix this with the fundamentals.

      If news are good we will probably break the double top. But if fundamentals start to weaken, Bears will have more confidence knowing this S/R has been strong to reject two times the bulls.

      Good luck