Daily Chart Art – September 8, 2011

GBP/JPY: 4-hour

GBP/JPY 4-hour Chart

First up on today’s canvas is GBP/JPY chillin’ like ice cream fillin’ at its previous low. And you know what, I think I see a regular bullish divergence too! The pair is making lower lows but Stochastic is making higher lows. Does this mean we’ll see the pound rally? Maybe. But I wouldn’t get too excited just yet. Be wary of a strong break below the support area, around 123.00 as this could mean that the pair could tumble to its previous low around 122.50.

EUR/GBP: 4-hour

EUR/GBP 4-hour Chart

Now check out EUR/GBP lookin’ so sexy with ’em Fibonacci lines! It looks like bulls are testing resistance at the 61.8% Fib level and a bearish divergence is about to materialize with Stochastic already in the overbought area. However, before you get excited and start shorting the pair, you may want to wait for more confirmation signals (e.g. candlesticks). After all, the Stochastic lines haven’t crossed yet. Who knows, we may just see the pair rally back up to the major resistance area at .8870.

AUD/USD: 4-hour

AUD/USD 4-hour Chart

Last on today’s lineup is AUD/USD which shares a similar setup to EUR/GBP. See the pair testing the 61.8% Fib level too? Some of you may even find this pair more aPIPtizing (Ha! Get it??) because the bearish divergence is more apparent with the Stochastic lines having already crossed. However, if you’re still unconvinced that the bears would hustle some muscle to push AUD/USD back down to 1.0500 and you prefer going long, you may want to wait for a bullish candle to close above 1.0650.

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!