Daily Chart Art – May 12, 2010

USDCAD: 4-hour

PoD Chart

It looks like the USDCAD is revving up for another move upwards. I say this for a couple of reasons. For one, it is currently finding support at the broken falling trend line, somewhere around the 1.0150-1.0200 region, which served as strong resistance in the past. Remember, whenever price passes through a resistance level, that level becomes support. And secondly, stochastics indicate that conditions are deeply oversold, hinting that sellers might be running out of steam. If the pair starts rising again, a move towards 1.0500 is likely. On the other hand, if a 4-hour candle convincingly closes below 1.0150, expect the pair to fall back to parity.

AUDUSD: Daily

PoD Chart

Thanks to its sharp dive last week, the AUDUSD pair is now back below the falling trend line on the daily chart. More than a month ago, the pair broke this trend line and enjoyed a 3-week stay above. However, the pair failed to sustain its rally and soon fell back under. After the pair slid to a low of 0.8713, buyers now seem ready to make a comeback and push the price higher. The pair could pull up until the 61.8% Fibonacci retracement level before resuming its downward movement. But, if Aussie bulls become more aggressive, they could even take the pair above the trend line and go for the pair’s 2010 high of 0.9389.

EURUSD: Weekly

PoD Chart

And finally, here’s another one of my rare weekly charts on a euro pair. After a series of sharp dives since November last year, the pair seemed to pause right on the major support level around 1.2500 to 1.2530. Well, I thought that long red candle from last week would pierce through that support level but it seems like the sellers ran out of steam. This week, the pair looks ready to make another attempt at breaking that major support level. If it succeeds, it could fall until the next support level in sight, which is near its 2005 lows at 1.1700. That’s from half a decade ago!