Daily Chart Art – October 20, 2010

NZD/USD: Daily

NZD/USD chart

Aha! It looks like the Kiwi’s getting tired of flying up the charts! NZD/USD seems ready for a pullback as it formed that long red candle a few days after reaching a high of .7644. The Stochastic is still moving out of the overbought area, which means that sellers probably have enough energy to push the pair down. However, NZD/USD could find support at the former resistance level around the psychological .7400 handle. This lines up with the 38.2% Fibonacci retracement level, from which the pair could bounce.

GBP/JPY: 4-hour

GBP/JPYchart

Yo dawgs, what’s up? Guppy could be. Holler! Just check out GBP/JPY chillin’ at the bottom of the descending channel on the 4-hour chart. Sweet, eh? With Stochastic being in the oversold turf, it looks like there ain’t enough bears left to reprezent! If this is the case, we may just see the bulls take over and hustle ’em muscles to the top of the channel somewhere between the 61.8% and 50.0% Fib levels before the bears get their mojo back and bring the pair down to 127.00. However, if resistance at the top of the channel doesn’t hold, GBP/JPY could end up testing the 130.00 handle.

EUR/USD: 4-hour

EUR/USD chart

Is it gettin’ hot in here or is it just EUR/USD sizzlin’ with that head and shoulders pattern? Sha-bam! Well, it seems like the bears finally got to strut their stuff on the charts yesterday after the bulls got rejected at the 1.4000 handle. However, with Stochastic hollering that EUR/USD is oversold, we may just see the pair retrace some of its losses back to the 50.0% Fib and retest the neckline before the bears continue their strut. However, if EUR/USD doesn’t find resistance at the 50.0% Fib, the bulls could hustle it back to 1.4000.