Daily Chart Art – May 23, 2016

GBP/AUD: 1-hour

GBP/AUD 1-Hour Forex Chart

GBP/AUD 1-Hour Forex Chart

First up is a simple trend play on GBP/AUD. The pair is currently having trouble breaking below the 2.0050 psychological area, which also lines up with the 50% Fib, 100 SMA, and rising trend line. What makes this setup more interesting is that there’s also a bullish divergence on the 1-hour time frame. Think the pound will soon gain pips on the Aussie? Keep close tabs on this one, folks!

USD/JPY: 4-hour

USD/JPY 4-hour Forex Chart

USD/JPY 4-hour Forex Chart

Can’t get enough of trend trades? Here’s another one for you! USD/JPY is lollygagging at the 100.00 major psychological (MaPs) handle, which is right smack at a falling trend line resistance. What’s more, a bearish divergence is also forming on the 4-hour chart. A short trade at current levels could give you a good reward-to-risk ratio especially if you place your stops above the trend line. Remember to keep your stops wide though, as yen pairs like this one tend to be more volatile than the other currency pairs.

USD/CAD: Daily

USD/CAD Daily Forex Chart

USD/CAD Daily Forex Chart

After bouncing from the 1.2400 area, USD/CAD looks set to revisit the area of interest around the 1.3400 handle. See, the area has served as resistance in late 2015 and is currently lined up with a 38.2% Fib on the daily chart. What’s more, there’s also a possible SMA crossover in the making. The cherry on top of the bears’ sundae is an overbought stochastic signal. A short trade near the 38.2% Fib could make for a good trade if you believe that the Greenback will head back to its previous lows against the Loonie. Of course, you could also wait for a break above the psychological level if you think that the dollar still has momentum on its side.

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.