Daily Chart Art – October 7, 2011

USD/CAD: 4-hour

USD/CAD 4-hour Chart

I know you boys and girls like to trade ‘em Fibs and divergences, so I put this one up for you. The dollar bulls should take note of a possible support at USD/CAD‘s 1.0350 level as it is sitting on the 50% Fib retracement near a former resistance area. Not only that, a bullish divergence and an oversold Stochastic signal is supporting the trade idea. The 1.0600 handle might be a good target if you’re going long, but keep an eye out for a break below the rising trendline.

GBP/JPY: 4-hour

GBP/JPY 4-hour Chart

Am I seeing double? Not only is GBP/JPY showing a double bottom setup on the 4-hour chart, it’s also very much like the GBP/USD chart I put up yesterday! The pair seems to have found support at the 117.00 handle, and it looks like it’s heading north. But be careful, brothas! Stochastic is nearly in the overbought region. If you’re bullish for the pound for the next couple of days you can aim for the 120.50 resistance, while you can also wait for a break below 117.00 if you’re bearish on the pair.

EUR/JPY: 1-hour

EUR/JPY 1-hour Chart

If you’re not in the mood for swing trades, then you could probably play this Fib and trendline setup on EUR/JPY. The pair seems to have rejected the 103.00 handle, but I’m seeing a possible support at the 102.20 – 102.50 area. You could probably place a stop below the trendline support if you’re going long, while the bears can also aim for the 101.00 if the pair does break the possible support areas.

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!

3 comments

  1. Clyder

    I’ll have a close look at these trade. Followed a couple of your earlier suggestions this week and they turned out nicely, thank you very much :)
    Thanks Pip Man.

    Reply
  2. Hush

    That u talk divergences,i have had a rough time deciding whether to take the bottoms or the tops?Does it mean when its an uptrend we consider bottoms and tops for a downtrend?

    Reply
    • Clyder

      Tops and bottoms are reversal patterns. During an uptrend, double tops means look for a possible bearish reversal, and during a down trend bottoms indicate possible bullish turn around.

      Reply

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