Daily Chart Art – October 7, 2009

USDCHF: 4-hour

PoD Chart

Is that hidden bullish divergence I see on the USDCHF 4-hour chart? The pair has formed higher lows but the stochastics shows lower lows! The stochastic is currently trying to climb out of the oversold area, indicating that the price could shoot up anytime soon. If it does, it could reverse upon hitting the psychological resistance at 1.0300. Still, the pair could dip lower, probably until the psychologically significant 1.0200 mark, which is nearly in line with the pair’s previous lows.

EURUSD: 4-hour

PoD Chart

The trend is definitely up for the EURUSD. Notice how traders kept buying the pair on the dips, especially at important technical levels. One of these is the resistance turned support I pointed out last week. Secondly, there’s the ascending trend line which has provided support for the pair since May 2009. Lastly, the pair headed north whenever stochastics hit oversold conditions. With the pair currently trading just a few pips above 1.4700, it looks like its next stop is 1.4844, this year’s high. However, if the pair retraces some of its gains, a lot of buying pressures could be found at the rising trend line somewhere around the psychologically significant 1.4600 price level.

GBPUSD: 1-hour

PoD Chart

The cable is virtually directionless as can be seen in its 60-minute chart. After failing to move above the psychological 1.6000 resistance, the pair fell in an almost vertical fashion. Good thing the 1.5900 support was able to catch it and keep it afloat. Currently, the pair is trading just above the mentioned level. Since conditions are far from being overbought, as indicated by the stochastics, the pair still has a lot of room to move up. It could again reach 1.6000 if buyers remain interested. On the down side, if bad UK economics continue to show, traders could dump the pair yet again to as low as 1.5800.

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