Daily Chart Art – June 9, 2011

EUR/GBP: 4-hour

EUR/GBP 4-hour chart

Will the .8900 handle become a resistance-turned-support level? The patterns are certainly in the euro bulls’ favor, as a bullish divergence, oversold Stochastic signal, and potential support at .8900 are signaling buy signals. But don’t bet the farm just yet! We could be seeing a prolonged reaction to the .8900 resistance, and the pair could still go back to as low as .8800. The .9000 handle might be a good target for the bulls, while the bears can make a play for .8000 if price breaks below .8900.

EUR/CHF: 4-hour

EUR/CHF 4-hour chart

Over here in EUR/CHF‘s I’m seeing an ascending triangle forming on the 4-hour chart, which is lining up nicely with a bullish divergence and a nearly oversold Stochastic signal. The bulls can make a play for 1.2450 if the pair breaks resistance at 1.2300, but my students at the School of Pipsology know that an ascending triangle can also break to the downside, which can drag the pair all the way to 1.2100.

GBP/USD: 1-hour

GBP/USD 1-hour chart

My last magic trick for the day is another ascending triangle setup, this time on GBP/USD‘s 1-hour chart. Price is moving along the pattern nicely, but an overbought Stochastic signal supporting a possible resistance at 1.6450. Will the pair finally break the resistance today? 1.6550 looks like a pretty good day trade target for the bulls, while the bears can also sell at 1.6450 and aim for the support at the rising trendline.

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!