Daily Chart Art – May 9, 2012

USDX: Daily

U.S. Dollar Index Daily Chart

I don’t usually post U.S. dollar index charts but I’ll make an exception today! As you can see, price appears to be breaking out of a very significant falling trend line. Normally, I’d consider this as a clean break but something tells me that this could simply be a fakeout rather than a true breakout! If you look at the upper shadows of the last two candles, you can see that they were somewhat extended. This suggests that the bears didn’t give up their positions easily, and that they put up a strong fight. I’m also concerned about the overbought Stochastic, as it could mean that the bulls are running out of steam. Let’s see where price will end up today!

USD/JPY: 1-Hour

USD/JPY 1-Hour Chart

Oh look at what we have here… A range seems to be forming on the USD/JPY hourly chart! Yesterday, price found support for the second time around the 76.65 level, enabling the pair to form a nice and clean horizontal channel. Watch the boundaries of the range closely folks, as they could serve as good entry levels for your buy or sell trades.

EUR/CAD: 4-Hour

EUR/CAD 4-Hour Chart

Judging from how EUR/CAD’s trading range has been tightening over the last few days, we may see a breakout soon. This tightening formation on EUR/CAD’s 4-hour chart is called falling wedge and it suggests that an upside break is likely (but not certain, of course). If you’re bullish on the pair, watch the upper boundary of the wedge closely. A convincing close above could mean that a new uptrend is forming.

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.

  • Koorosh

    Hello,

    Could you please let me know how we can have USDX chart in MT4? As a chart not as a indicator.

    • bigpippin

      Yo homie! I’m afraid I cannot help you because I do no use MT4. I use XTICK for my charting.