Daily Chart Art – July 17, 2012

GBP/JPY: 1-hour

GBP/JPY Hourly Chart

Holy brotha of Cyclopip! Is that a breakout on GBP/JPY?! It seems like it! After making lower highs and higher lows for the past few days, the pair has finally closed above the falling trend line. In fact, the last two candles look pretty darn bullish to me (although the most recent one hasn’t closed yet). This COULD mean that there may be enough bulls in the market to push the pair back up to 125.50. BUT be careful homies! Stochastic already indicates overbought conditions. Who knows, this may also be nothing more than just a fakeout and GBP/JPY would soon head back down to 122.00.

AUD/USD: 1-hour

AUD/USD Hourly Chart

“Aussie, Aussie, Aussie, Oi, Oi, Oi!” It looks like Aussie bulls need to be cheered on as AUD/USD approaches the 1.0300 handle. Can the pair close above its previous trend line (connecting June 4 to July 11 lows) after getting rejected at the resistance area yesterday? Maybe. But I wouldn’t jump to that conclusion yet until I see a strong close above 1.0300. If the pair finds resistance at the trend line again today, we could soon see it tumble back down to around 1.0100.

USD/JPY: 1-hour

USD/JPY Hourly Chart

Finally, here’s a potential retracement play for all you Fibonacci fan boys (and girls)! Remember that range I pointed out on USD/JPY last week? Well, price broke below the support level around 79.30. But don’t fret! With Stochastic indicating upward momentum for the pair, we could soon see price pull back to the 50% Fib level and test the bottom of last week’s range. Keep tabs on the level, ayt? Reversal candlesticks could signal that price would soon drop to 78.00 while a strong break above the area may mean that USD/JPY is on its way up to 80.00.

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.