Daily Chart Art – September 2, 2011

EUR/USD: Daily

EUR/USD Daily Chart

Aaaaah… Breakout! Just like a blast from the past, EUR/USD broke through the bottom of the ascending triangle on its daily chart. An entire candle already closed below the rising trend line, confirming the breakout. If you’re bearish on this pair, it’s not too late to jump in because it could still have a long way to go down south. When I took a quick peek at my Chart Patterns Cheat Sheet, I remembered that the size of the breakout is approximately equal to the height of the formation, which is 600 pips in this case.

GBP/USD: 4-hour

GBP/USD 4-hour Chart

Pound bears could use a break, don’t you think? GBP/USD already made a big drop yesterday and might be due for a quick retracement. There’s a falling trend line connecting the highs of the price on the 4-hour chart, showing that the downtrend is still very much intact. The pair could pull up to the 50% Fibonacci retracement level, which is in line with a possible support turned resistance area, before heading further down. Be careful though, stochastic just crossed from the oversold region, suggesting that pound bulls could take GBP/USD much higher.

USD/CHF: 4-hour

USD/CHF 4-hour Chart

I bet SNB officials are on their toes right now, waiting to see if the resistance turned support at .7950 holds! I’m seeing a bit of bullish divergence on USD/CHF’s 4-hour chart, which could mean that the franc’s rally is over. If it bounces from .7950, it could go all the way back to its recent highs around .8200. But if .7950 gives way, the next support level seems to be at the .7800 area.

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!