Daily Chart Art – February 10, 2010

EURUSD: 4-Hour

PoD Chart

Is it just me or does this upward move of the EURUSD looking very much like a correction? For one thing, it is making its way to the 61.8% Fibonacci retracement level. Look at how it lines up nicely with 1.3850, a broken support-turned-resistance level. Secondly, stochastics just hit oversold territory, signaling a possible down move. More importantly, if you’ve been keeping up with my blog updates you’ll know that the same setup was seen exactly a week ago. Given these, it is likely that we see price bounce at 1.3850 and target former lows at 1.3600. On the flip side, however, if we do see a candle close above 1.3850, price would most likely head to 1.4000, the next major resistance level.

AUDUSD: 4-Hour

PoD Chart

Looks to me like the AUDUSD has recovered a bit after dropping steeply last week. The pair has bounced back up to just under the 0.8800 price level. However, with price approaching the 61.8% Fibonacci as well as the falling trend line, could we be in for another drop? Note that bearish divergence has formed as price has registered lower highs while stochastic has shown higher highs. Also, the last few candles suggest that the Fib level is holding soundly, not to mention that it lines up also with a former support area. If resistance holds, look for sellers to jump back and bring price back down to the recent swing low near 0.8600. On the other hand, if buying pressure remains strong, we could see price test highs above 0.8900.

USDCAD: 1-Hour

PoD Chart

Lastly, let’s end with a look at the Loonie. The pair has been ranging as of late, bouncing between the 1.0650 and 1.0770 price levels. With price hanging just above the support level, will we see price bounce back up? Or are we in line for a breakout? With stochastic indicating oversold conditions, we could see price bounce right back and test resistance at 1.0770 once again. On the other hand, if the sellers bust out the big guns and break through support, we could see price fall to as low as 1.0550.