Daily Chart Art – November 3, 2011

GBP/USD: 4-hour

GBP/USD 4-Hour Chart

If you’re a fan of breakout patterns, then you’re going to love GBP/USD! As you can see, a rough head and shoulders pattern has formed on the 4-hour chart. With the pair trading below the 1.5900 major psychological handle, it seems that a breakout is in the cards. If we see a candle close below neckline support, a strong move towards former lows around 1.5700 isn’t unlikely.

USD/CHF: 4-hour

USD/CHF 4-Hour Chart

Next on the list is a nice Fib setup on USD/CHF. After finding a bottom at .8500 and then rising, the pair has found significant resistance at the 50% Fibonacci retracement level. This Fib level is a very important one as it also served as major support before. Remember, whenever price passes through support, that level becomes resistance. If you’re bearish on the pair, now might be good time to consider selling and ride the long-term downtrend.

USD/CAD: 4-hour

USD/CAD 4-Hour Chart

Ho, ho, ho, it appears that a previously broken trend line resistance held as support yesterday. With the resistance-turned-support trend line serving as a springboard for the pair, does this mean we’ll see more gains? That seems to be the case, so keep a close eye on the 1.0200 major psychological level. A break of 1.0200 could lead to a stronger rally and a move to 1.0300.

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.