Daily Chart Art – March 9, 2012

AUD/USD: 4-hour

AUD/USD 4-hour Chart

Ha! So much for that bearish flag I pointed out yesterday! AUD/USD just kept crawling higher! The good news though is that a Fibonacci setup is now forming, as price stalled right under the 50.0% Fib level, which just happens to line up with a former support level as well. With Stochastic deep in overbought territory, now might be a good time to start putting up some short positions. However, if you remain unconvinced, you can also wait for a test of the 61.8% Fib, which also happens to line up with the psychologically round 1.0700 handle.

EUR/USD: 4-hour

EUR/USD 4-hour Chart

What a run by the euro! EUR/USD is now back just under the 1.3300 handle, after it looked it was destined to retest the 1.3000 handle! The question is, how much longer can the euro stay resilient? The pair seems to have found resistance at the 50.0% Fibonacci level and has formed two dojis under that level. Meanwhile, Stochastic is showing signs of a downward crossover soon, the bullish momentum may be coming to an end. I suggest waiting for a bearish candlestick close, as this would be a nice signal that sellers are back in business.

USD/CHF: 4-hour

USD/CHF 4-hour Chart

Last up, here’s a take on the Swissy. After dropping just over 100 pips from its highs, USD/CHF has cooled off a bit and is now consolidating. It seems to me that a bearish flag could now be in the works. Are the bears just hibernating and gearing up for another strong move down? Pay attention to the next couple of candles, as it could signal to us whether or not selling pressure is here to stay. If we see a solid bearish marubozu candle begin to form, that may be our cue to load up on the shorts!

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.