Daily Chart Art – May 10, 2010

EURUSD: 4-hour

PoD Chart

After the EURUSD’s sharp drop last week, it looks like there is no doubt in anyone’s mind that the pair is now in downtrend mode! For Big Pippin, this means it’s the perfect time to use the Fibonacci tool! As you can see from the 4-hour chart of the EURUSD I posted, the pair opened up this week with a huge 150 pip gap up. Despite the extremely bullish move, the pair immediately found some sellers right on the 50% Fibonacci retracement level. Keep a close eye on that 50% Fib level, because if the pair fails to breach through, expect to see the EURUSD fall back towards last week’s low at 1.2525.

CADJPY: Weekly

PoD Chart

Next, let’s take a look at the CADJPY. After last week’s Fat Finger episode, the CADJPY broke past a former area of interest around 90.25, dipping as low as 82.30 before bouncing right back up. With price showing higher highs and stochastics showing lower highs, it looks like some bearish divergence has formed. With stochastics pointing south, we could see the pair continue to fall before testing the rising support line at 84.00.

GBPUSD: Daily

PoD Chart

Trend riders beware! It looks like a reversal pin bar candlestick has formed on the GBPUSD daily! Characterized by a very long shadow, the pin bar candlestick indicates that there was a large number of buyers in a certain area. In this case, it seems that buyers were very interested in protecting that 1.4500 handle, as they believe that the pair would climb up after hitting this level. With that said, we could see a slight correction early at the beginning of this week, probably towards minor support-turned-resistance at 1.5100. Still, if we see price go past the low of the pin bar candle, the pair’s next likely stop would be the 1.4000 handle.