Daily Chart Art – August 6, 2009

EURUSD: 4-hour

PoD Chart

Ohhhhh… A bullish flag chart pattern has formed on the four-hour chart of the EURUSD after its convincing rally last Monday. Price just completely tore through the trend line resistance causing the pair to make a new yearly high in the process. From the looks of it, the pair is on the verge of blowing up as it has been consolidating for the last two days, bouncing around minor support 1.4365 and minor resistance at 1.4440. If the pair breaks out topside, potential resistance could be found at 1.4500 and 1.4700 respectively. Conversely, if the pair drops back down, the pair could retest the broken trend line resistance around the 1.4300 price region. This also coincides nicely with the previous week’s high.

NZDUSD: 1-hour

PoD Chart

Warning! The NZD/USD pair appears to be in trouble. Yesterday, price action retraced back to the 38.2% Fibonacci level of the most recent motive wave (the most recent uptrend within the uptrend) after rising all the way to the 0.6750 mark. It, however, failed to close above the previous high. The NZD/USD pair is on hot waters right now as it looks to be forming a triple top formation. A triple top formation is a bearish reversal pattern. The price is currently tiptoeing on over the uptrend line. If the supports on this level and at the psychological 0.6700 mark break, then the pair may head lower until it finds some immediate ground at 0.6650. On the flip side, the pair may reach 0.6800 if the supports hold and the pair breaks above the previous day’s high.

USDCHF: 4-hour

PoD Chart

Is that a bearish flag formation I see on the USDCHF 4-hour chart? The pair has just breached support at 1.0640 a few days ago as long red candles pierced through the bottom of the Swissy’s usual range. After that sharp drop, the price is currently consolidating in its attempt to jump back in the range. The previous support level seems to have switched gears and turned into a resistance level. If what we’re seeing is indeed a bearish flag, then the pair is headed for another sharp drop, possibly until the psychologically significant 1.0500 mark. But if the pair builds up momentum enough to carry it back inside the range, then it could keep moving higher – possibly until the top of the range at 1.0940.