Daily Chart Art – January 20, 2010

EURUSD: 1-Hour

PoD Chart

Let’s start with my thoughts on the EURUSD pair. Well, as you can see, the pair broke down from a classic rising wedge pattern. Interestingly, the pair reversed its course right at the 38.2% Fibonacci retracement level that I drew. Presently, the pair appears to be making another bearish pennant formation. Since it is coming off a downtrend, it has more downside bias. So if the pair falls from the pennant, its downside target would be around 1.4225.

GBPUSD: 1-Hour

PoD Chart

Next is the GBPUSD on its 1-hour chart. The GBPUSD pair has been trending up for the past several days. It actually broke above the resistance around 1.6355 yesterday as traders anticipate a higher inflation figure for the UK. It, however, fell back to the uptrend line after reaching a new 5-week high at around 1.6458. Presently, the uptrend line that I drew is keeping the pair afloat. Should this support hold, then it’s likely for the pair to revisit its yesterday’s high again. On the flip side, it can find itself down at 1.6300 if the uptrend line gets breached.

USDCHF: 4-hour

PoD Chart

Check out the USDCHF 4-hour chart I posted above. The pair just broke above the descending trend line connecting the highs of the price, signaling that the downtrend could be over. However, with the stochastics starting to make their way out of the overbought area, a bit of downward price action could come next. The pair could pull back to the 38.2% Fibonacci retracement level, which lines up with the previous support around 1.0270. The pair could also retreat up to the 50% Fibonacci level, which is in line with the previous day low. There’s also the chance that the possible downward movement could be stronger, taking the pair back below the falling trend line. If that happens, the next support level in sight is at the 1.0135 area.