Daily Forex Chart Art – Feb. 9, 2015

GBP/USD: 1-hour

GBP/USD 1-hour Forex Chart

GBP/USD 1-hour Forex Chart

Let’s start off with a simple break-and-retest play on GBP/USD’s 1-hour forex chart! The pair just recently broke past the 1.5200 major psychological resistance and zoomed up to the 1.5350 area before retreating. The broken resistance level lines up with the 38.2% Fibonacci retracement level, which means that it might hold as support. In addition, a bullish divergence can be seen as price made higher lows while stochastic drew lower lows. Better make sure this setup meets the 9 Rules for Trading Divergences if you’re gonna go long!

EUR/USD: 1-hour

EUR/USD 1-hour Forex Chart

EUR/USD 1-hour Forex Chart

Careful, euro bulls! EUR/USD’s uptrend might soon turn, as price formed a double top formation on its 1-hour forex time frame. Price is still testing the neckline around the 1.1300 major psychological support and a breakdown has to take place to confirm the potential reversal. If this happens, EUR/USD might fall by as much as 200 pips, which is the same height as the chart pattern. Stochastic is starting to move out from the oversold area though, which means that a bounce back to the recent highs around 1.1500 might be in order.

USD/JPY: 4-hour

USD/JPY 4-hour Forex Chart

USD/JPY 4-hour Forex Chart

Batter up, dollar bulls! USD/JPY seems ready to go for more gains, as the pair just broke to the upside from its descending triangle pattern on the 4-hour forex chart. This pattern is roughly 500 pips in height, which suggests that the resulting breakout could be of the same size. Stochastic is still moving up, indicating that buyers are still on top of their game, but the oscillator is about to reach the overbought zone. A pullback to the broken triangle resistance might still be possible before this pair heads further north.

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.