Daily Chart Art – May 16, 2011

USD/JPY: 1-hour

USD/JPY 1-hour Chart

Who’s up for trading another divergence? USD/JPY is hanging around a potential resistance at the 81.00 handle just when a bearish divergence is forming in the 1-hour chart. What’s more, Stochastic has already crossed the overbought region! Are your dollar-bearish enough to short this baby? You could aim for a potential support at the 80.50 handle, while the dollar bulls can look out for a bounce and an oversold Stochastic signal.

EUR/CHF: Daily

EUR/CHF Daily

For y’all range players out there, here’s another treat for ya! EUR/CHF has been trading on a 700-pip range since the start of the year, and it looks like it’s about to test support at 1.2500. Stochastic is currently lollygagging around the oversold area, so watch for any signs of reversal! You could catch the potential move by placing tight stop losses and putting your profit target at the top of the range near 1.3200, but you could also settle for the 1.2800 handle. Be careful though, as the pair could still break the range to the downside!

GBP/USD: 1-hour

GBP/USD 1-hour Chart

Last on my trading docket today is a Fibonacci play on GBP/USD‘s 1-hour chart. After reaching a support near the 1.6150 area last week, the pair is inching towards a potential resistance at 1.6250. An oversold Stochastic signal is supporting an upward movement right now, but the pair could encounter resistance at the 61.8% Fib, which also lines up nicely with the minor psychological handle. A short entry at the level might be a cool idea, especially if you place a stop above the previous range and your profit target is near the previous low.

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!

  • Sledziu32

     choose some indicators
    choose pairs
    look for signals.

  • Harsimran Singh Bajaj

     plzz tell how do spot such nice trades.what do u think or do when u open a pairs chart.what do u really do????

  • Tellaadelodun

     I have a greater interest in trading Forex but I don’t know when to buy or sell a particular paired currency. I need to know how to relate the news with the chart in order to be proficient in the world of Forex market. I will be expecting your quick response, and my contact info is (tellaadelodun@yahoo.com) but I don’t know when to buy or sell a particular paired currency. I need to know how to relate the news with the chart in order to be proficient in the world of Forex market. I will be expecting your quick response, and my contact info is (tellaadelodun@yahoo.com)