Daily Chart Art – February 5, 2010

GBPUSD: 1-Hour

PoD Chart

Let’s first look at the Cable’s 1 hour chart. Dollar buying continued to strengthen yesterday which caused the pair to fall below its weekly low. Currently, it looks like it is poised for another downward move because of a presence of a bearish pennant formation. The overall bias is to the downside since the pair’s downtrend is still well intact. The pair can find itself at least at 1.5700 if it breaks down from the formation. On the flip side, it may also consolidate for a while or even correct a little bit, perhaps reaching the previous support at 1.5850.

AUDUSD: 1-hour

PoD Chart

Whoa! The AUDUSD pair just broke below the support at 0.8790 yesterday, proceeding to dip close to the psychological 0.8600 handle. With all this strong selling, AUD bears must be exhausted. In fact, the stochastics indicate oversold conditions, suggesting that the pair could pull back higher. The pair could retrace up to the 61.8% Fibonacci level, which coincides with the psychologically significant 0.8800 mark. Aside from that, it is also nearly in line with the broken support level. If the bears take the upper hand once again, the pair could soon break below the previous low of 0.8607.

EURUSD: 1-Hour

PoD Chart

Now, the fiber’s (EURUSD) price action is almost like a mirror image of the GBPUSD’s. Similarly, the pair fell below its weekly low at 1.3852 and is now consolidating into a bearish pennant pattern. The pair may break down from this pattern if dollar buying remains. Its downside target would be around 1.3650 if it does move lower. On the other hand, the pair can also took a breather and even retrace all the way back up to 1.3850 before continuing its downward move.