Daily Chart Art – October 11, 2011

EUR/GBP: 4-hour

EUR/GBP 4-hour Chart

First up on my list is the 4-hour chart of EUR/GBP. Price has been making “lower highs” for quite a while now as shown by the falling trend line. With price about to touch the falling trend line and the Stochastic showing overbought conditions, it appears that we’ve got a nice short signal on our hands. If the falling trend line holds, we may see price drop back down and test support around the .8850 level.

NZD/USD: Daily

NZD/USD Daily Chart

Uh-huh, you know what it is! It’s a broken support level that could possibly turn into resistance on NZD/USD! Remember, whenever price passes through a major support level, that level has a high possibility of becoming a resistance area. This means that if price tests .8000, it is reasonable to expect that it would hold as resistance and see price sell-off. Be careful though, the bulls may still have some ammunition left in them! After all, the Stochastic is still very far from the overbought territory.

EUR/JPY: Daily

EUR/JPY Daily Chart

And as always, I’ve got a retracement setup for the Fib traders out there. As you can see, EUR/JPY is currently making its way higher after it hit a bottom just above the major 100.00 handle. With the Stochastic NOT yet at overbought territory, it looks like there’s a chance to sell the pair at an even better price. If you’re part of the bear camp and want to jump in the overall longer-term trend, the area between the 38.2% and 61.8% Fibonacci retracement levels might be a good area to short!

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.