Daily Chart Art – May 13, 2011

USD/JPY: 4-hour

USD/JPY 4-hour Chart

If using Fibonacci retracement levels, then this update is for you! As you can see, USD/JPY has been on a steady downtrend for a couple weeks already as it has been consistently making “lower highs” and “lower lows.” With price finding significant resistant at the 50% Fibonacci retracement level, it seems that we’ll see USD/JPY continue with its overall downtrend. Watch this pair carefully brothas! You never know when the bears are going to jump in and take the pair back down to its former low at 79.60!

USD/CAD: Daily

USD/CAD Daily

Will you look at that? The falling channel on USD/CAD’s daily chart is still holding! The pair just bounced from the bottom of the channel this week and seems poised to test the top. I put up some Fib levels to identify possible areas of resistance but, if USD/CAD shoots above the 61.8% retracement level, that would count as a breakout. There’s still a bearish divergence forming though, which means that the odds are slightly tilted to the downside. According to the 9 Rules for Trading Divergences, we should wait for a Stochastic crossover before shorting.

USD/CHF: Daily

USD/CHF Daily Chart

Want another Fib setup? Then take a look at the daily chart of USD/CHF! This playa has been on a sweet downtrend the past couple of months, but has retraced a bit over the past week. Just like that snazzy band Black Eyed Peas, I gotta feeling that this could be a good opportunity for the bears to come back and start partyin’! Aside from approaching potential support-turned-resistance at .8950 – which just happens to line up with the 50.0% Fib level as well! – the pair is also forming bearish divergence. Boo yeah! Look for a Stochastic crossover and some bearish reversal candlestick patterns as a sign that bears are back!

Before you get carried away with all these chart patterns and candlesticks, 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!