Daily Chart Art – June 10, 2011

EUR/USD: 1-hour

EUR/USD 1-hour Chart

What usually occurs after you spot a head and shoulders pattern? A breakout, of course! Yesterday, EUR/USD dropped like a rock after it had formed a very visible head and shoulders pattern on the 1-hour chart. If you were unable to jump in and sell the pair, then don’t ya worry, because EUR/USD looks like it is revving up for another move down. As you can see, EUR/USD has managed to make its way back to the broken neckline support. This could be a good chance for the latecomers to sell the reversal!

USD/CHF: Daily

USD/CHF Daily Chart

Speaking of reversals, USD/CHF seems to be in the middle of one. The pair, after consolidating for three whole days just above .8300, popped up yesterday and formed a bullish engulfing candle on the daily . Could this mean that the downtrend is over? If you’re REALLY bullish on the pair and want to risk it, now is a great time to buy. Do be careful of the .8550 level though, as it served as support before. Once price passes through a major support level, that level usually becomes resistance.

USD/JPY: 4-hour

USD/JPY 4-hour Chart

Of course, what’s a Big Pippin update without a lovely Fibonacci retracement setup? If you look at the 4-hour chart of USD/JPY, you’ll see that the pair is on retracement mode as it makes its way to the 50% Fibonacci retracement level. With the Stochastic about to hit overbought territory, we could see the pair continue with its downtrend soon. Watch the 50% Fib carefully folks, as it could very well serve as a major resistance level!

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 Economic Roundup. Check him out, playas!

5 comments

  1. MedicalChew

    I’d also like to add that 0.8550 is a roughly the level for the 38.2% fib level for a line drawn from 0.8946 to 0.8327. on top of that, 0.8550 will still be blow the major falling trendline on the daily drawn and extended from Feb high to April high.

    I’m looking to short at 0.8550 with an SL above the trendline.

    Reply
  2. Mhlanzi M

    I read your posts every day 06:00amCAT and your post is there.  It’s like my first stop before my trading day.

    Reply

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