Daily Chart Art – November 14, 2011

GBP/USD: 4-hour

GBP/USD 4-hour Chart

Gotta bounce yo! Last week, the 1.5900 major psychological handle held like a boss when GBP/USD bounced after hitting that support level. GBP/USD made its way close to the top of the range on the 4-hour chart and is currently approaching the 1.6100 mark. Stochastic is already in the overbought zone, suggesting that pound bulls could use a break. Keep a close eye on the 1.6130-1.6150 region since GBP/USD’s climb could end right there, but make sure you refer to the School of Pipsology’s Japanese candlesticks cheat sheet before taking any short trades!

USD/CAD: 4-hour

USD/CAD 4-hour Chart

Is that a rising channel forming on USD/CAD’s 4-hour chart? It looks like the pair is forming higher highs and higher lows as it tries to edge up the charts. USD/CAD just gapped lower over the weekend but it seems to be back in the channel and making its way up. Besides, Loonie bulls are looking exhausted now that stochastic is in the oversold area. With that, USD/CAD could soar all the way up to the top of the channel, which is just above the 1.0250 minor psychological level. Stay on your toes for a possible downside breakout though!

EUR/JPY: 4-hour

EUR/JPY 4-hour Chart

When it comes to support and resistance levels, yen pairs really know how to give ’em respect. That is probably why EUR/JPY seems to be having a tough time climbing above the former support level at 106.60, which is in line with the 61.8% Fibonacci retracement level. On top of that, I’m seeing a spinning top right on the Fib level while stochastic is nearing the overbought territory. If the 61.8% Fib holds as resistance, EUR/JPY could fall back to its recent lows around the 105.00 mark.

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.