Daily Chart Art – May 3, 2012

USD/CAD: 4-hour

USD/CAD 4-hour Chart

Let’s start things off with USD/CAD sportin’ a bearish divergence on the 4-hour timeframe. To make the pair even better for y’all who don’t feel like buying the dollar today, a bearish engulfing candle has materialized at the previous support level. Does this mean we’re gonna see price drop to .9800 soon? Maybe. But don’t be so sure about it. A strong break above .9900 could be a sign that USD/CAD will soon trade around parity again.

USD/CHF: 4-hour

USD/CHF: 4-hour Chart

Also struttin’ the charts with a sexy setup is USD/CHF on the 4-hour timeframe. Stochastic indicates that the pair is already overbought. However, connecting the pair’s most recent highs and lows, we see that a symmetrical triangle could be in the making and it could test resistance at the falling trendline (around .9175). If reversal candlesticks form around the area, it could mean that price would soon fall back down to .9100. However, a convincing close above .9175 could hint that USD/CHF would soon rise back to .9250.

EUR/GBP: 1-hour

EUR/GBP 1-hour Chart

If you’re on the hunt for a breakout trade, look no further than EUR/GBP! On the 1-hour timeframe, we see that the pair has been consolidating for a while. If you have a bullish bias for the euro, you may want to look for a close above .8135 before pulling the trigger. However, if you think that pound bulls are merely taking a break and would soon resume their rally, be on your toes for the pair to make a new low below .8112.

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.

2 comments

  1. CalumFX

    I’m a beginner to analysis. Thank you babypips.

    Something I noticed… The EUR/GBP bullish breakout was approximately the same height in pips as the height of the wedge opening.

    Reply

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