Daily Chart Art – July 18, 2012

EUR/JPY: 1-hour

EUR/JPY Hourly Chart

Do those dojis on the hourly chart of EUR/JPY look dope, or what?? If you’ve been through the awesome School of Pipsology, you probably know that these candlesticks usually signal a reversal. Oh, but wait! To make the pair even more tempting for the bears, Stochastic is already in the overbought territory. Is it time to short the pair? Err, I’d be careful if I were you. As I have pointed out in my Daily Chart Art on July 11, the 97.00 handle is a significant support level for EUR/JPY. A strong close above 97.50 could mean that the pair is on it way back up to 101.00.

GBP/USD: 4-hour

GBP/USD 4-hour Chart

Just how low can the pound go? I ask myself the same question, bro. Connecting the pairs most recent highs on the 4-hour chart of GBP/USD, we see that price is actually testing resistance at the falling trend line now. Stochastic indicates that the pair is already overbought and could soon drop down to around 1.5400. However, a strong close above yesterday’s high around 1.5680 could be a sign that GBP/USD is on its way back up to 1.5850.

NZD/USD: 4-hour

NZD/USD 4-hour Chart

Last and certainly not the least, is NZD/USD sportin’ a potential head and shoulders pattern. On the 4-hour timeframe, we see that its currently trading around the .8000 handle where it previously found resistance. If there are enough bears in the market, we could see NZD/USD tumble back down to around .7850 and test the neckline. However, if Kiwi bulls still have enough muscle to hustle, the pair could skyrocket up to its previous high at .8050.

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.

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