Daily Chart Art – July 4, 2011

EUR/JPY: Daily

EUR/JPY Daily Chart

First on the canvas today is a potential support-turned-resistance play on EUR/JPY. The pair is currently testing 117.50, which is not only a minor psychological level, but is also a support-turned-resistance area for the pair. On top of that, there seems to be a bearish divergence forming with price making lower highs and the overbought Stochastic signal making higher highs. If you’re bearish on the pair you can place a tight stop and target the 115.00 support, while the bulls can also make a play for a potential double bottom and wait for a break above the 117.50 resistance.

GBP/USD: 1-hour

GBP/USD 1-hour Chart

Who’s up for trading Cable today? GBP/USD looks like it’s sporting an ascending triangle on the 1-hour chart, but there’s also a potential resistance at the 1.6080 handle. What’s more, there’s also a bearish divergence on the chart with Stochastic supporting an overbought signal. If you’re bearish on the pair you can place a stop above 1.6100 and aim for the rising trendline support, while the bulls can also wait for a break above the resistance.

GBP/JPY: 1-hour

GBP/JPY 1-hour Chart

Last on the table today is another resistance play with GBP/JPY. Like the other setups that I pointed out, there’s a potential resistance at the major 130.00 level, and it looks like there might also be a bearish divergence and an overbought Stochastic signal on the 1-hour chart. Of course, you could also make a play for the rising trendline support, which could yield you a few pips if you target the 130.00 resistance.

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. Check him out, playas!

  • Chuka Madu

    EUR/JPY looks poised to break above 117.58 Resistance. For the bulls, it should probably be best to wait for a rotation down to 116.03 level, which is the Daily 61.8fib% or even much lower. It looks also good for bears who might want to play such a rotation down.