Daily Chart Art – October 17, 2012

EUR/GBP: 1-hour

EUR/GBP 1-Hour Chart

Yowza! After rallying past the major resistance level around .8100, is the euro finally running out of steam? On the hourly time frame of EUR/GBP, we see that a hanging man and a shooting star (both considered reversal candlesticks) have just materialized. Stochastic also indicates that the pair is already overbought. Yikes! But fret not, euro bulls! Using the Fibonacci tool, it looks like we could see the pair find some support between the 38.2% and 50% Fib levels, which coincide nicely with its previous high. If there aren’t enough buyers in the area though, we could see EUR/GBP drop back below .8050.

AUD/USD: Daily

AUD/USD Daily Chart

Here’s an easy one for y’all! Stochastic just left the oversold region on AUD/USD’s daily chart and based on past performance, it looks like it’s about to tag price along on its way up. The 1.0500 – 1.0600 area is a good profit target if you think that the Aussie bulls are just getting warmed up. But if you’re one of them Aussie bears, you could always wait for reversal candles at the 1.0400 zone, which is right around the middle of the range.

USD/CAD: 1-hour

EUR/GBP 1-Hour Chart

Don’t look now, but USD/CAD is sitting right on top of the rising channel on its 1-hour time frame with a bearish divergence to boot! The pair has been crawling inside this ascending range for more than a week already and it seems that the top could still hold for now. USD/CAD just made higher highs while Stochastic drew lower highs and is looking ready to move out of the overbought region. Make sure you take a look at the 9 Rules for Trading Divergences first if you plan to play this one!

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.