Daily Chart Art – January 29, 2010

GBPJPY: 4-Hour

PoD Chart

Let’s kick start the update with the GBPJPY. It seems that the pair is in the midst of forming an inverted head and shoulders pattern. Notice how the pair is finding some major support at the right shoulder, causing some two spinning tops to form. This usually indicates indecision between the buyers and sellers, signifying a possible reversal or correction. I suspect, if we do see buyers take control, they will be going for a retest the resistance at 147.00. Still, watch out for a break of the previous candle’s low… If this happens, the pair’s next stop would likely be at 143.65.

EURJPY: 1-Hour

PoD Chart

Looks like that falling trendline that I pointed out yesterday held! After touching the 127.00 price handle and meeting the descending trendline, price dropped like a hot tamale. Price is now sitting on top of support around 125.30. It seems to me that a descending triangle is forming on the pair. Now, if support holds, we could see price rise to test the rising trendline once again at around 126.50. On the otehr hand, if selling pressure is strong, we could see support break and price fall to make news lows around 124.00.

GBPUSD: 1-Hour

PoD Chart

Finally, let’s end with a look at the GBPUSD. Yesterday, the pair tested resistance at 1.6270, which held strongly. Price action then dipped and is now consolidating just above a rising trendline. With stochastic showing oversold conditions, could a reversal be in play? If buyers come back to play, they could bring price back up to test resistance at 1.6270 once again. However, if support fails to hold, sellers may bring price action down all the way to 1.5950 before finding further support.