Daily Chart Art – May 8, 2012

USD/CHF: Daily

USD/CHF Daily Chart

Predicting breakouts is difficult but there are some signs that can help us do it. In USD/CHF’s daily chart, for example, price is clearly forming “higher lows.” This suggests that the bulls are in control and are pushing for a break of the .9300 major psychological and resistance level. If price closes above .9300, price could head all the way to former highs around .9500.

USD/CAD: 1-hour

USD/CAD 1-Hour Chart

Fib lovers, unite! It appears that USD/CAD has found major support at the 50.0% Fibonacci retracement level. With the Stochastic showing that conditions are oversold, we could see the pair continue higher. If you’re bullish on the pair, now is a good time to consider buying!

GBP/JPY: 1-hour

USD/CAD 1-Hour Chart

I spy with my little eye, price making “lower highs” and the Stochastic forming “higher highs.” Is that a bearish divergence? It appears so! Given how price is finding resistance at the falling trend line, we could see price head lower. Be careful though… A falling wedge has also formed, which suggests that an upside break could happen.

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.

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