Daily Chart Art – May 14, 2010

GBPUSD: 4-hour

PoD Chart

Will ya take a look at that? After a couple of days of consolidation, the GBPUSD finally broke out of a symmetrical triangle! The only question now is, where is it headed? Notice how a spinning top has just formed. With potential bullish divergence forming, if we see another reversal candle – say, a doji or another spinning top – we could see a reversal soon, with buyers setting their eyes on an area of interest around 1.4820. Then again, those are some pretty bearish candles – could we see a retest of the 2010 low at 1.4480?

USDCHF : 4-hour

PoD Chart

I popped open a 4-hour chart of the USDCHF, and wadya know? A triangle is now forming! Could we see another breakout soon? If buyers kick it in and impose their will, look for the pair to aim for new highs around 1.1400. On the other hand, if we see a mad rush of selling, we could see price drop to test a former area of interest around 1.0925.

EURGBP: 4-hour

PoD Chart

After that really sharp dive from last week, the EURGBP pair pulled back up, possibly to retest that falling trend line on the 4-hour chart. It could retrace until the 50% Fibonacci level, which is closely in line with the psychological 0.8600 handle. I also spotted a nice bearish divergence forming as the price made lower highs while the stochastics are about to sketch higher highs. If the pair resumes its downward movement soon, it could fall back until its recent lows around 0.8450.