Daily Chart Art – May 17, 2012

EUR/USD: 1-hour

EUR/USD 1-hour Chart

Wanna get a piece of that EUR/USD drop? Well, this could be your chance right here! After bottoming around the 1.2700 handle, the pair seems ready for a pullback. Hey, euro bears need a break, too! EUR/USD could retrace until any of the Fibonacci levels, possibly up to the 61.8% level, which is right in line with the 1.2800 major psychological level. Oh, and did I mention that the 1.2800 mark coincides with the falling trend line connecting EUR/USD’s recent highs? Make sure you set your stops right if you take this one!

AUD/USD: 1-hour

AUD/USD 1-hour Chart

The Aussie’s downtrend is still very much intact as AUD/USD has been crawling inside a descending channel for more than a week now. The pair just bounced after hitting the bottom of the channel around the .9900 handle, and appears ready to test the top again. Stochastic is pointing upwards, suggesting that Aussie bulls could take the pair higher, possibly until the .9950 minor psychological resistance or maybe until parity. If those levels hold, AUD/USD could slide back to the bottom of the channel and even make a new low.

EUR/CAD: 4-hour

EUR/CAD 4-hour Chart

Now here’s a break-and-retest setup that Cyclopip might be interested in! Last week, this pair broke below support at the 1.2950 minor psychological level, before dipping to the 1.2800 handle earlier this week. With stochastic heading upwards and euro bears catching their breaths, EUR/CAD could pull up for a quick retest of the broken support level. Take note that 1.2950 is within the vicinity of the 61.8% Fib, which could also act as resistance for the pair. Wait for stochastic to turn if you plan to take this setup, all right?

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.

  • Finjoman

    Hi Big Pippin. Many thanks for your teachings. What level is parity on aussiedollar 1hr chart. This is a concept I am yet to fully understand. And with the stop, what level would be breakeven. I am yet to fully undertand this concept as well. Happy Pippin

    • bigpippin

      Parity just means the 1.0000 level. It is when two currencies are equal in value. (http://www.babypips.com/forexp

      Breakeven just means “0”. For instance, you sold AUD/USD at 1.0000 and you are up 50 pips. When you move your stop at “Breakeven” you are placing it at 1.0000. What this does if price goes against you and goes back to 1.0000, you lose nothing.

      Hope that helps.