Daily Forex Chart Art – Dec. 17, 2014

USD/CHF: 4-hour

USD/CHF 4-hour Forex Chart

USD/CHF 4-hour Forex Chart

Divergence alert! USD/CHF has recently formed lower lows while stochastic drew higher lows, creating a bullish divergence on its 4-hour forex chart. This suggests that a bounce might take place, especially since the pair is testing support at the bottom of the rising channel near the .9600 major psychological level. If USD/CHF resumes its climb, it could head back to the top of the range around the .9900 major psychological resistance. Better check if this setup meets the 9 Rules for Trading Divergences before jumping in!

USD/JPY: 1-hour

USD/JPY 1-hour Forex Chart

USD/JPY 1-hour Forex Chart

USD/JPY has made another sharp dive this week, but is currently pulling up for air after falling below the 116.00 handle. Price could retrace to the falling trend line on its 1-hour forex chart, as this lines up with the 100 SMA, which has acted as a dynamic resistance level in the past. The 61.8% Fibonacci level based on the latest swing high and low is also in line with the trend line, right around the 117.70 level. Stochastic is moving up, which means that buyers are in control of price action for now, with a move lower indicating that sellers are stepping up their game.

GBP/USD: 1-hour

GBP/USD 1-hour Forex Chart

GBP/USD 1-hour Forex Chart

Here’s an update on the GBP/USD forex range setup I showed y’all before. As expected, price bounced off the bottom of the range around the 1.5600 major psychological support and moved back to the top at 1.5750. While resistance seems to be holding for now, a bullish flag has formed right at the 1.5750 minor psychological mark, hinting at a potential upside break. If that happens, price could move up by as much as 150 pips, which is the same size as the previous range. Stochastic is pointing up, suggesting that pound bulls have enough energy for another leg higher.

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.