Daily Chart Art – October 6, 2011

GBP/USD: 4-hour

GBP/USD 4-hour Chart

Oooh la la! Check out that sexy pair of double bottoms on the 4-hour chart of Cable. Siiizlin’, right? All you cool cats who have gone through the School of Pipsology probably know that this chart pattern is usually taken as a sign of a reversal. But don’t get too excited about seeing the pair rally back up to 1.5600 just yet. Who knows, there may still be enough bears in the market to push the pair below 1.5400.

USD/JPY: 1-hour

USD/JPY 1-hour Chart

Now it’s time to rise and shine and check out this rising trend line on USD/JPY. It seems like dollar bulls have been cruisin’ up the charts for the past couple of weeks and the pair could soon be on its way back above 77.00. Well, that is if support at the trend line holds. So keep close tabs on it! A strong break below 76.60 may mean that USD/JPY could soon tumble to 76.00.

NZD/USD: 4-hour

NZD/USD 4-hour Chart

Lastly, here’s NZD/USD on the 4-hour time frame. Using the Fibonacci retracement tool, we see that the bulls are struggling to push the pair above the 38.2% Fib level. Heck, a shooting star even formed at the resistance area and a bearish divergence also materialized with Stochastic already in the overbought territory. Does this mean the bears will pounce on the pair soon? Maybe. But don’t get too carried away shorting the Kiwi. Be on your toes for a bullish a candlestick as it could signal that NZD/USD is on its way back up to .7900.

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. Check him out, playas!

1 comment

  1. ireitz

    Please explain the bearish divergence – I’m not sure I recognise it!  Still too inexperienced.   Thanks

    Reply

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