Daily Chart Art – Jan. 10, 2017

GBP/JPY: 1-hour

GBP/JPY 1-hour Forex Chart

GBP/JPY 1-hour Forex Chart

Guppy is lollygagging at the 141.00 major psychological handle, which isn’t surprising since it lines up with not only a falling channel support, but also an area of interest from back in late November. This time around an oversold stochastic signal is also giving go signals for pound bulls. Think the pair will see a bounce today? Or will yen bulls push for a continuation of the short-term downtrend without taking a breather? Countertrend traders can buy at current levels and place stops just below the channel support. But if countertrend trading isn’t your thing (it’s not for everyone!), you could either wait for a bit of a bounce or a downside breakout before placing your short orders.

EUR/AUD: 4-hour

EUR/AUD 4-hour Forex Chart

EUR/AUD 4-hour Forex Chart

Trend traders huddle up! EUR/AUD is forming what looks like a double bottom on the 4-hour time frame! What makes the setup more interesting is that the “bottoms” are right smack at the rising channel support near the 1.4400 major psychological handle AND the 100 and 200 SMAs. Talk about the stars lining up! Buying at current levels could get you a sweet reward-to-risk ratio especially if you aim for the channel resistance and place your stops just below the channel. Don’t use tight stops though, as currency crosses like these tend to be more volatile than the major currency pairs!

Forex Chart Settings:

Slow Stochastic: 14,3,3
100 SMA: Blue line
200 SMA: Red line

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.