Daily Forex Chart Art – July 1, 2014

USD/JPY: 4-hour

USD/JPY 4-hour Forex Chart

USD/JPY 4-hour Forex Chart

Careful, dollar bears! USD/JPY is already testing a strong support area that has held so far this year. See how price has bounced of the 101.00 to 101.35 region since January? Stochastic is indicating oversold conditions, which suggests that price could make another bounce this time. If that happens, USD/JPY could climb up to the nearby resistance at the 102.50 area or move even higher. Don’t dismiss the possibility of a downside break if selling pressure remains strong though!

USD/CHF: 4-hour

USD/CHF 4-hour Forex Chart

USD/CHF 4-hour Forex Chart

Missed the breakdown? Don’t fret! While USD/CHF doesn’t seem to be showing signs of pulling back to the broken support area, you haven’t completely missed the chance to catch some pips off a short trade as USD/CHF could still head down to the .8800 mark. Recall that the double top is roughly a hundred pips in height, which means that the resulting selloff could be of the same size. A stronger drop could last all the way down to the .8750 minor psychological support, but dollar bulls might still be able to put up a fight since stochastic is already in the oversold zone.

GBP/USD: 1-hour

GBP/USD 1-hour Forex Chart

GBP/USD 1-hour Forex Chart

Woah, what a run by the pound! Cable broke through the 1.7050 minor psychological ceiling and zoomed up to the 1.7100 handle, which appears to be holding as resistance at the moment. Stochastic is heading down from the overbought area, which means that buyers are already exhausted. This could lead to a pullback to the Fibs marked on the 1-hour forex chart, with the broken resistance area right in between the 38.2% and 50% retracement levels. In case the correction is shallow, make sure you wait for reversal candlesticks or for stochastic to turn from the oversold zone before going long!

 

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.