Daily Forex Chart Art – Oct. 17, 2014

GBP/JPY: 1-hour

GBP/JPY 1-hour Forex Chart

GBP/JPY 1-hour Forex Chart

First up, here’s a simple trend play on GBP/JPY that looks prime for the taking. The pair is gearing up to test the falling trend line on its 1-hour forex time frame while stochastic is indicating overbought conditions. The resistance area might hold, as it lines up with the 50% Fibonacci retracement level and the 172.50 minor psychological handle. In that case, GBP/JPY could make its way back to its recent lows at the 168.00 major psychological level or perhaps make new lows. Make sure you review our lesson on How to Combine Fibs with Trend Lines if you’re thinking of taking this setup!

USD/CAD: 1-hour

USD/CAD 1-hour Forex Chart

USD/CAD 1-hour Forex Chart

Reversal alert! USD/CAD has just formed a double top chart pattern on its 1-hour forex chart, indicating that the recent climb might soon reverse. The pair is currently testing the neckline of the formation, with a downside break likely to confirm the potential selloff. If that happens, USD/CAD could fall by as much as 100 pips, which is the same height as the chart pattern. Stochastic is moving out of the oversold area though, suggesting that a bounce might take place. If buyers are strong enough, they could still push the pair back to its recent highs at the 1.1375 area.

AUD/CAD: 1-hour

AUD/CAD 1-hour Forex Chart

AUD/CAD 1-hour Forex Chart

Last but certainly not least is a break-and-retest setup that’s already playin’ out! AUD/CAD appears to have found support at a broken resistance level, which is right around the .9850 minor psychological level. At the same time, stochastic is indicating a pickup in bullish momentum, which could take the pair up to its previous highs around .9960. Stronger buying pressure could even lead to the formation of new highs or a longer-term uptrend. However, if sellers regain control, they could push for a deeper retracement, possibly until the .9800 major psychological mark.

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.