Daily Chart Art – May 25, 2012

GBP/USD: Daily

GBP/USD Daily Chart

Will we see another major reversal at 1.5650 on GBP/USD? Maybe! This level has been a tough nut to crack in the past, and right now, we’re already seeing signs that bears are having difficulty taking price below this level. And what’s more, Stochastic is deeply oversold! Keep your eyes on this pair, homeboys. If today’s daily candlestick fails to close below 1.5650, it could mean that a break below this major level is just not meant to be!

GBP/JPY: 1-hour

GBP/JPY 1-hour Chart

A sweet little bearish pennant formed on GBP/JPY yesterday, and as we learned from the School of Pipsology, pennants are continuation patterns. What this means is that there’s a good chance that price will continue diving south when it breaks through the pennant’s boundaries. In any case, whether this pair breaks to the upside or to the downside, it would be wise to keep an eye on GBP/JPY as pennants tend to precede strong moves.

EUR/GBP: 1-hour

EUR/GBP 1-hour Chart

Anyone in the mood for this trend play? EUR/GBP has been a testy little pair in the last couple of days, and it’s been giving this falling trend line a run for its money. A bullish close above the trend line could signal the start of bull run that could see the pair rise to its former highs. On the other hand, if price finds resistance at the trend line for a fourth time, it could result in new lows for EUR/GBP.

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.