Daily Chart Art – March 15, 2011

NZD/USD: 4-hour

NZD/USD Chart

Aha! Here’s a potential 100-pip play on NZD/USD. See that double bottom formation on the 4-hour chart? Well, it looks like the pair is revving up for a breakout above the neckline! If that happens, it could signal that the downtrend is over and the pair could rally by a hundred pips, which is roughly the same height as the chart formation. Besides, there’s support turned resistance just below .7550. However, stochastic is on middle ground, which means that there’s also the chance that NZD/USD could drop and form another bottom. If it does, slide all the way down to the recent lows around .7325.

EUR/JPY: Daily

EUR/JPY Chart

Resistance, comin’ up! We’ve been seeing wild swings in this yen cross in the past couple of days, with buyers and sellers struggling to gain control of the pair. But it looks like the final battle is approaching! The pair is on its way to test the 115.00 handle again, a level that has held as resistance since mid-2010. Thinking of playing this setup? Be on the lookout for a bullish marubozu above this resistance level as it could result in a sharp, extended rally to complete the double bottom formation I pointed out in the past. However, the inability to close above 115.00 might mean that there aren’t enough buyers to take this pair higher, and that price is ready to turn back down all the way to 107.00.

GBP/USD: 4-hour

GBP/USD Chart

Check your watches, kids, ’cause it looks like it might be time to short this sucker! We’ve got several reasons to sell GBP/USD. First of all, price is just coming off of a failed test of the 1.6200 major psychological handle, which lines up perfectly with the 61.8% Fibonacci retracement level. Secondly, we’ve received confirmation from candlesticks in the form of a doji-esque spinning top! And lastly, Stochastic is well into the overbought region and is on the brink of crossing over! If this baby does drop, as these signs seem to be indicating, it would fall all the way to 1.6000. But if it decides not to get with the program, bulls may carry it back up to around 1.6300.