Daily Chart Art - March 15, 2010
EURUSD: 1-Hour
Let's kick off with the EURUSD 1-hour chart. The pair has been moving beneath a descending trend line in the past week, only to stage a strong breakout last Friday. Before proceeding to head any higher, the pair could pull back as the buyers gather more steam to fuel the pair's rise. The EURUSD pair could retrace until the 61.8% Fibonacci retracement level, which lines up with a minor support level. From then, the pair could surge all the way up to its previous week high near the psychological 1.3800 handle.
GBPUSD: 4-Hour
Now let's move on to the GBPUSD 4-hour chart. Are those double bottom I see? Why, yes they are! The pair bounced a couple of times from the 1.4850 to 1.4900 area and is now resting at the neckline around the psychological 1.5200 handle. If the pair is able to break above this neckline, it could surge all the way to its recent high near at the 1.5600 mark. On the other hand, if the pair is unable to break above the neckline, it could fall back and find psychological support at 1.4900.
USDCHF: 4-Hour
Next is the USDCHF on its 4-hour time frame. As you can see, the pair recently broke down from a complex head and shoulders formation. With the stochastics already in the oversold territory, the pair could retrace possibly back to test the former neckline before moving south again. But if risk appetite continues, it could fall straight down to 1.0500.
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Forex Blog: Pippin Ain't Easy
I too spotted the GBPUSD: 4-Hour setup yesterday and pondered whether to trade it when the markets opened. I decided not to 'cus prices paused at a big number, or in your words 'around the psychological 1.5200' level. Also my stop would have to have been at the 1.4900 level which would have broken my personal Risk rules. Am doing the old 9-5 right now so won't have a look until this evening.
Good call, i love breakout trades backed by reversal patterns.
I'm a bit worried about that double bottom in the cable. Now that some more data has come in, it looks to me more like a flag pattern in a continuing downward trend. But sometimes continuation patterns turn out to be reversal patterns don't they?