Daily Chart Art – May 22, 2012

USD/CAD: Daily

USD/CAD Daily Chart

Sound the alarms, we’ve got an evening star formation on USD/CAD! As you all know, this pattern can usually be found at the end of a trend. In other words, a major reversal could be in the works! With Stochastic indicating deeply overbought conditions, USD/CAD looks like it may experience a bit of selling pressure in the coming days. If you wanna take your chances with a short position, keep in mind that the 1.0050 handle was once a formidable resistance area and may act as support in the future.

GBP/USD: 1-hour

GBP/USD 1-hour Chart

If breakout plays tickle your fancy, GBP/USD’s got just the thing for you! It has formed a sweet little rising wedge the past couple of days, and it seems like it may break any moment. Since the chart pattern formed after a downtrend, the tendency is for it to break to the downside. But with forex, there’s no such thing as a “sure thing,” so be on the lookout for a possible upside breakout as well!

USD/JPY: 4-hour

USD/JPY 4-hour Chart

This chart on USD/JPY shows just how beastly the yen has been over the past two months. Momentum is clearly siding with yen bulls, homies! If you want to jump on the bandwagon, you may get a chance to do so if and when price retests the falling trend line. Just be sure to wait for confirmation from Japanese candlesticks or Stochastic before you make your move!

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.