Daily Chart Art – October 31, 2013

GBP/USD: Daily

gbpusd

Pound bulls must’ve gotten spooked by this double top pattern on Cable’s daily time frame! GBP/USD has yet to break below the 1.6000 major psychological support and the neckline somewhere around the 1.5900 area before a longer-term downtrend is confirmed, but it wouldn’t hurt to keep this pair on your watch list until then. Stochastic is moving down from the overbought zone, which means that pound bears are in for a treat!

NZD/JPY: 4-hour

nzdjpy

Now here’s a pair that’s already ripe for the picking! NZD/JPY is already testing the neckline of the double top pattern on its 4-hour time frame, suggesting that a breakdown might be just around the corner. However, stochastic has yet to make its way to the overbought territory before Kiwi bears could pounce. Better keep your eyes glued to the 80.00 to 81.00 area if you’re waiting for a strong break to the downside.

EUR/AUD: 1-hour

euraud

Heads up! This one’s already breaking down! EUR/AUD seems ready to head in the southbound direction, as the neckline of the double top pattern on its 1-hour chart already appears to be broken. Stochastic is also edging lower, which means that there’s enough selling pressure going around. The pattern is roughly 75 pips tall so the resulting selloff could be of the same size, but make sure you review our lesson on trading breakouts before jumping in!

To get the complete picture and avoid getting blindsided by economic data, you also have to do your fundamental analysis.

Lucky for us, Pip Diddy fills us in on what we need to know about fundamentals with his Daily Forex Fundamentals.

  • Joel

    Hi,
    Been following your posts on FB and yahoo, it’s been part of my routine every morning. I like using horizontal support/resistance lines, i try to enter after retest coming from a big swing. I took this EUR/AUD, observing that it is bouncing off 1.45 a 3rd time and after seeing this blog as confirmation. Wow! already got 100+ pips as of this writing. Thank you so much keep posting.

    • Big Pippin

      Congratulations on that EUR/AUD trade! Looks like event catalysts in the euro zone lined up for that short pretty well. Did you keep the trade open?

      • Joel

        I closed it and then opened it again last friday to get 54 pips more, it went as far as another 94 pips but made a very long bullish candle so I exited. Maybe I should learn continuation techniques to know when to exit and when to hold position?