Daily Chart Art – August 19, 2010

AUDUSD: 4-hour

PoD Chart

Feast your eyes on that head and shoulders pattern forming on AUDUSD! By the looks of it, the pair is setting up to test the neckline again. Can it break past the .8900 handle to complete the formation? If it does burst through, don’t be surprised to see it fall to .8750, a resistance-turned-support level. But if it fails to break the neckline, AUDUSD may find itself back up near the tops of the “shoulders” at around .9060.

CADJPY: 4-hour

PoD Chart

Next up, let’s see what’s poppin’ over on CADJPY. Will ya take a look at those lovely double bottoms! The question is, is a breakout in the cards? If you’re a big fan of stochastics, then you would probably be leaning towards a bounce from the neckline resistance, as stochastics are indicating overbought conditions. If selling pressure kicks back in, they might just bring price back down to test the recent low at 81.10! On the other hand, if we see a candle close above 83.50, it may signal that a breakout is indeed in the works. Look for buyers to push price back up to test the previous high at 85.00.

USDCAD: 4-hour

PoD Chart

Woo! Don’t you just love the smell of dojis in the morning?! USDCAD looks like it might be getting ready to make a U-turn judging by the dojis that formed on a former support and resistance level. Oh, and what’s this I see? Is that a bullish divergence? Why, yes it is! If the pair bounces up, it might climb all the way to 1.0400. But watch out because if candlesticks start closing below 1.0250, the pair could be headed down to 1.0100!