Daily Chart Art – February 1, 2010

GBPUSD: 4-Hour

PoD Chart

The pound bears are having a feast nowadays as the GBPUSD slid lower when it broke down from a symmetrical triangle pattern. It looks like Lady Luck is once again on their side with the Cable gapping down during the opening of today’s session. The pair, however, could trade below the 1.6000 handle for awhile before heading lower since the stochastics are already in the oversold region. It is likely to fall further since there is no apparent reversal signal yet. If it does then 1.5900 and 1.5850 could be its next downside targets.

EURUSD: Daily

PoD Chart

Next is the EURUSD on its daily chart. Using Elliot wave analysis, the pair could be presently at the tail end of the C wave already. Since there is no apparent swing low yet, Wave C can still extend further down until it find some support somewhere between 1.3800 and 1.3700. With the stochastics in the oversold area, it is likely for the pair to turn up soon, perhaps forming another Wave 1. But if the area of support that I mentioned earlier gives way, the pair could fall all the way down at the support just below 1.3000.

NZDUSD: 1-hour

PoD Chart

Here’s what I spotted on the NZDUSD 1-hour chart. A descending trend line can be drawn connecting the highs of the pair and it seems like the trend line has held for almost two weeks! The pair retested the trend line resistance last Friday as it bounced from support around 0.7030 and retraced until the 61.8% Fibonacci level. Right now, it looks like the pair has broken below support at 0.7030 and may proceed to move lower. However, the stochastics are climbing out of the oversold area, indicating that upward price action could take place soon. If the pair lands back above 0.7030, it could move all the way up to retest the trend line once more. On the other hand, if the broken support at 0.7030 serves as a resistance level, the pair could tumble all the way down once it breaks the psychological 0.7000 barrier.

  • quicklearnforex

    It looks like the chart patterns form depend on the broker you are trading. For the GBPUSD pair it looks like it formed a symmetrical triangle for you but for me it formed a channel. But any how the same way you shown the channel was broken in the downward direction.

  • Synergistik

    For the GBPUSB you said the stochastics are in the oversold area, and so could head down.

    For the EURUSD you said the stochastics are in the oversold area, and so it could head up.

    I didn’t see the what made them different, if both were in oversold areas. Would appreciate if you could elaborate for a newbie.

    Cheers.

  • pipsprof.

    @synergistik, check out oscillator indicators at babypips,and read stochastics well. Thanks Art of the Chart,quite useful insight you have given us.

  • quicklearnforex

    It looks like the chart patterns form depend on the broker you are trading. For the GBPUSD pair it looks like it formed a symmetrical triangle for you but for me it formed a channel. But any how the same way you shown the channel was broken in the downward direction.

  • Synergistik

    For the GBPUSB you said the stochastics are in the oversold area, and so could head down.

    For the EURUSD you said the stochastics are in the oversold area, and so it could head up.

    I didn’t see the what made them different, if both were in oversold areas. Would appreciate if you could elaborate for a newbie.

    Cheers.

  • PipDevil

    Correct me if I’m wrong but I think Big Pippin is saying that with stochastics at oversold territory, the GBPUSD will have a harder time going down. He says that the GPBUSD could stay around the 1.6000 handle for a while, which to me means that it is building up momentum first. Sellers might be exhausted and need a break… Maybe until stochastics go out of oversold territory. The EURUSD, on the other hand, has a higher chance of bouncing because of the stochastics + support + elliot wave combination.

  • pipsprof.

    @synergistik, check out oscillator indicators at babypips,and read stochastics well. Thanks Art of the Chart,quite useful insight you have given us.

  • PipDevil

    Correct me if I’m wrong but I think Big Pippin is saying that with stochastics at oversold territory, the GBPUSD will have a harder time going down. He says that the GPBUSD could stay around the 1.6000 handle for a while, which to me means that it is building up momentum first. Sellers might be exhausted and need a break… Maybe until stochastics go out of oversold territory. The EURUSD, on the other hand, has a higher chance of bouncing because of the stochastics + support + elliot wave combination.

  • pipsprof.

    @pipsdevil, you are absolutely right.you can see that both g/u and e/u are up now and consolidating b4 the final pushdown.Big Pippin,your charts are always spot on,pls keep up the good work!!!!!!!!!!

  • pipsprof.

    @pipsdevil, you are absolutely right.you can see that both g/u and e/u are up now and consolidating b4 the final pushdown.Big Pippin,your charts are always spot on,pls keep up the good work!!!!!!!!!!