Daily Chart Art – June 7, 2011

EUR/USD: 4-hour

EUR/USD 4-hour chart

Let me start the post with my favorite setup of the day: a Fibonacci play on EUR/USD. As you can see, price is currently retracing its gains after it hit a top at 1.4658 yesterday. Since the Stochastic just went out of overbought territory and is pointing downwards, it seems that we’ll see the pair post more losses and possibly drop to those oh-so-important Fibonacci retracement levels. If you’re bullish on the pair, watch the 1.4300 level carefully, as served as support in the past and it lines up with the 50% Fib nicely.

GBP/USD: 4-hour

GBP/USD 4-hour chart

For chart pattern lovers, take a look at how GBP/USD is sporting a sexy descending triangle! A descending triangle is usually considered bearish, as it hints at a breakout to the downside. In this case, watch support at the 1.6300 major psychological level carefully! If the pair manages to close below it, we could see it fall further 200 pips more to 1.6100.

EUR/CHF: 1-hour

EUR/CHF 1-hour chart

Finally, let’s move on to EUR/CHF. After staging a massive drop a week ago, it looks like EUR/CHF is beginning to recuperate its losses. Will we see more gains? Quite possibly as the pair is showing a bullish divergence and price has been making “higher lows.” For now, it is likely that we will see price edge higher and retest former highs at 1.2250.

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!

3 comments

  1. Charles Uzodinma

    As i type, the EUR/USD seems to be forming a double top. There is also divergence on the MACD histogram. Thanks again.

    Charles.

    Reply
  2. ViciousP

    I think at this point, the real drama will occur if the pair does go
    bearish and we start to meet up with the 100 SMA for the first time in a
    couple of weeks.  I’m looking for that first, then fib lines.

    Reply

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