Daily Chart Art – November 10, 2011

GBP/USD: 4-hour

GBP/USD 4-hour Chart

Am I seeing double? Unless my eyes are deceiving me, those seem to be double tops on cable’s 4-hour chart. According to the School of Pipsology, this chart pattern is usually considered a reversal signal, suggesting that GBP/USD could be on a downtrend soon. If it breaks below the neckline at 1.5900, that is! Bear in mind that the formation is roughly 200 pips in height so if we see a breakdown, cable could also fall by 200 pips until 1.5700. See for yourself in our Chart Patterns Cheat Sheet!

USD/CAD: 4-hour

USD/CAD 4-hour Chart

If there’s one thing I know about USD/CAD, it’s that this pair loves to range. As you can see from its 4-hour chart, resistance at the 1.0200-1.0250 area has been holding up pretty well for almost an entire month already. With USD/CAD ready to test this level again, the question is: Will resistance still hold? Stochastic is almost at the overbought zone, suggesting that dollar bulls are getting tired. If the top of the range holds, USD/CAD could fall back to the nearby support at the 1.0100 handle.

EUR/JPY: 4-hour

EUR/JPY 4-hour Chart

After that strong break below the 106.50 minor psychological support, euro bears might need to catch their breath. EUR/JPY seems to be finding support at the 105.00 handle as stochastic reached the oversold region. This could mean that the pair is ready to retrace back to the area of interest around 106.50, which is right between the 50% and 61.8% Fibonacci retracement levels, before resuming its drop. But if EUR/JPY surges past those Fibs, it could climb until the next resistance at 108.00. You never know when the BOJ is gonna intervene again!

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.