Daily Forex Chart Art – July 9, 2014

GBP/JPY: 4-hour

GBP/JPY 4-hour Forex Chart

GBP/JPY 4-hour Forex Chart

Check out this fresh trend forming on GBP/JPY’s 4-hour forex time frame! Price has already bounced three times off the rising support area, suggesting that it has a pretty good chance of holding again on the next test. Using the Fib tool on the latest swing low and high reveals that the 61.8% level lines up with the trend line, former resistance, and 100 SMA. Stochastic is already indicating oversold conditions though, which means that bears are tired and that bulls are ready to charge soon, possibly taking the pair back to its previous highs and beyond!

GBP/CHF: 4-hour

GBP/CHF 4-hour Forex Chart

GBP/CHF 4-hour Forex Chart

Now here’s a pound pair that’s been moving above a rising trend line for quite some time now. GBP/CHF has been forming higher lows since mid-March this year, with the 100 SMA also acting as a dynamic support level for pullbacks. Price looks poised to make another one of those retracements again, with stochastic still heading towards the oversold zone. The 61.8% Fib level coincides with the trend line and the 100 SMA, making it a potential floor. Just make sure you set your stop below the 200 SMA if you’re planning on going long.

EUR/GBP: 4-hour

EUR/GBP 4-hour Forex Chart

EUR/GBP 4-hour Forex Chart

Can’t decide which currency to buy the pound against? You might want to consider the euro, as EUR/GBP has been trading in a steady downtrend for the past three months. To top it off, a bearish divergence appears to be forming, as stochastic made higher highs while price is making lower highs. A higher retracement could last until the 61.8% Fib, which is closer to the trend line and the .8000 major psychological resistance. If that holds as a ceiling for any rallies, the resulting selloff could push EUR/GBP back down to its previous lows at .7915 or allow it to make new ones.

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.