Daily Chart Art – January 14, 2010

AUDJPY: 4-Hour

PoD Chart

Let’s begin with my thoughts on the AUDJPY. So, the pair recently broke its short term uptrend line but it could just be correcting since there is no clear sign of reversal yet. It actually bounced off the 38.2% Fibonacci retracement level after breaking the trend line. If buying interests surfaces again then it can easily revisit its yearly high at 86.22. The presence of a hidden bullish divergence also adds to its upside bias. But if, for some reason, it decides to turn south, then its next possible stages of support would be at its Fibonacci levels – 83.34, 82.45, and 81.55.

USDCHF: 1-hour

PoD Chart

Is that a bearish flag I see on the USDCHF 1-hour chart? After a sharp, almost vertical, dive the pair has been stuck in consolidation, right between support at 1.0140 and resistance around 1.0205. If that formation is indeed a bearish flag, it implies that the pair could break to the downside and fall until the next support level – possibly at the psychological 1.0100 handle. On the other hand, if the pair breaks to the upside, it could encounter resistance at the broken support level around 1.0260 to 1.0265. The stochastics are currently on middle ground, which means that the pair could go either way. It could continue to bounce up and down within its current range until it goes for a breakout.

GBPUSD: Daily

PoD Chart

Guess what?! I see another divergence in the daily chart of the GBPUSD. But this time it’s a bearish one where the price is making lower lows and the stochastics are making higher highs. Of course, this suggests that the pair could be heading down again soon. Notice also that the price is presently trading at the downtrend line that I drew. With conditions being overbought, the pair could yet again fall down to 1.5900. If, however, the pair gets lucky and break the downtrend resistance then it can go all the way up to 1.6500.