Daily Chart Art – August 17, 2016

EUR/GBP: 1-hour

EUR/GBP: 1-Hour Forex Chart

EUR/GBP: 1-Hour Forex Chart

First up is a nice and simple trend trade on EUR/GBP. The pair is having trouble breaking above the .8650 minor psychological (MiPs) handle, which isn’t surprising since it’s right smack at the rising trend line and 100 SMA support on the 1-hour time frame. Not only that, but the chart is also sporting a possible bullish divergence in the making. Buying at current levels and aiming for previous highs could make for a good short-term trade especially if you place your stops just below the SMA support. Just make sure you practice good risk management!

GBP/USD: 1-hour

GBP/USD: 1-Hour Forex Chart

GBP/USD: 1-Hour Forex Chart

Next up is a textbook Fibonacci trade on Cable. The pair is finding resistance at the 1.3075 area, which not only lines up with the 38.2% Fib retracement, but also a previous support that had been valid since late July. Oh, and look at stochastic chillin’ like a villain on the overbought territory! Think the pound is about to see more losses against the dollar? Read up on using Fibs for trend setups like these if you haven’t done it yet!

GBP/JPY: 1-hour

GBP/JPY: 1-Hour Forex Chart

GBP/JPY: 1-Hour Forex Chart

Remember the Guppy downtrend that we checked out a couple of days back? Well, here’s your chance at jumping in! GBP/JPY is testing the 131.00 major psychological handle, which lines up with the 100 SMA, 50% Fib retracement, and a previous support on the 1-hour chart. The cherry on top of this sweet setup sundae is stochastic flashing an overbought signal. Shorting at current levels could give you a good reward-to-risk ratio especially if you believe that the pound would clock in new lows against the yen. Of course, you could also wait for a break above said resistance levels if you’re one of them pound bulls.

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.