Daily Chart Art – May 23, 2011

GBP/USD 4-hour

GBP/USD 4-hour chart

Major psychological handle? Check! Descending channel? Check! It doesn’t get much sweeter than this! If you’re feeling bearish for the pound, you might just get a chance to short it as it retests the falling trend line at around 1.6300. But be warned! A double bottom formation has formed and it has its neckline right at the 1.6300 handle. According to the School of Pipsology, double bottoms are reversal patterns, so the pair could be gearing up for a major breakout to the upside.

USD/JPY 1-hour

USD/JPY 1-hour chart

Rest assured, you won’t find dandruff on USD/JPY! Not with that potential head and shoulders pattern in the works! Haha! As you can see, we have the formation’s neckline set right at the 1.6150 handle. If price goes below this, it might not stop until it hits 1.6100!

EUR/USD 4-hour

EUR/USD 4-hour chart

Euro bears finished hard and strong last Friday, but will they continue to dominate EUR/USD today? Well, it seems like it should be smooth sailing for sellers until they hit 1.4050. That’s where it’ll get interesting! If price manages to bounce off this level again, it could complete a double bottom formation. But if bears take it below 1.4050, the pair may be in for fresh lows! Still uncertain which direction to play? Wait for confirmation from candlesticks to guide the way!

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!

  • JackL

    Three charts, three good shots, man, you are awesome!