Recapping the Majors
EUR/USD- The Euro started off the week with a small rally as it continued past 3800 and reached as high as 3838 before heading back down below the 3800 mark. The Euro has been rallying since the beginning of August and may be on its way back up to 3850 where it previously peaked on July 23rd.
Result: The Euro rallied slightly early on in the day but was still unable to keep itself above 3800.
GBP/USD- The Sterling took a nose dive today after the Industrial Production report came out and has found support at 2.0300. The pair had previously been rallying for the past 5 trading sessions after it finally found resistance at its 61% Fib line at around 2.0450 last Thursday.
Result: The Sterling took a big hit today as it dropped from its 61% Fib line at 2.0450 all the way down to 2.0300. (150 pip drop)
USD/CHF- The Swissy dropped heavily early on in the day as it plummetted down to 1800. However the Dollar came back and pushed the pair back up to just under 1900. The pair had been treading support at 2000 for several days before the pair finally dropped last Thursday.
Result: The Swissy dropped early on but the Dollar pushed the pair right back up to where it opened to just under 1900 at around 1890.
USD/JPY- The Dollar plunged early on against the Yen as it nearly hit 117.00 but gained its ground and pushed it back up to above 118.00 to around 118.50. The pair has been choppy for several days as it has been bouncing between 118.00 and 119.00.
Result: The Dollar gained slightly against the Yen as it rallied nearly 50 pips from 118.00 to around 118.50.
Chart Analysis: What’s going to happen next?
Well the Euro did shoot up like I said it would last Thursday and it seems to be headed back to the 3850 mark. The pair previously hit that high back on July 23rd before it fell all the way down to 3600 so if the momentum can continue for the Euro bulls I would set 3850 as my target. Daily stochastics are also trending up so this is a good indication that we’ll see more bullish movement in the pair. If you are already long I you might have to face some retracement as 4hr stochastics are in overbought territory but keep your eye out for the 3850 mark.
Back on Thursday I said that I saw signs for the Cable to shoot up to its 61% Fib line on the daily chart and thats what took place on Friday. However the pair has dropped down since then and I think we’ll see a little more bearish movement before the pair shoots back up again. 4hr stochastics are trending down and are just heading into oversold territory which confirms my bearish sentiment. Currently the pair is trading right around 2.0300 and I would look for the pair to drop down to its 200 SMA on the 4hr chart at around 2.0250.
Finally the Swissy dropped after holding support at 2000 for soooo long. I said the pair would hit 1900 but it has gone even further and dropped all the way down to around 1800. 4hr stochastics are trending up and just leaving oversold territory but daily stochastics are still trending down. It’s tough to say where this pair might go since I don’t have any good indications so I’m going to stay out for now.
The USD/JPY has been very choppy as its been bouncing between 118.00 to 119.00. Both 4hr and daily stochastics are trending up with daily stochastics just leaving oversold territory. Currently the pair is trading around 118.60 and I would watch for the pair to rise up to 119.00 which also happens to be where the 50 EMA is on the 4hr chart. This should make it a good place to take profit.