Another day of blah!

The dollar made a small rally against the majors today after crude fell to $55.64/barrel. This is the lowest its been since 2005. When oil prices falls, we get cheaper gas. And when gas prices drop, it leaves more discretionary income for the consumers which theoretically means more consumer spending on other items. More consumer spending means better GDP and stronger economy.

Coming Up:

US Trade Balance
8:30 am ET; 13:30 GMT
Previous= -58.9B; Consensus= -60.0B; Forecast Range= -63.5 to -57.0B

Chart Analysis:

EUR/USD

The Euro ended up hitting 3050 like I said yesterday but then proceeded to fall right back down to 3000. 4hr Stochastics is trending down and I think the pair will get down to around 2970. Daily stochastics is in oversold territory so I think the pair will shoot back up after falling to 2970.

GBP/USD

The Cable reached my target at 9450 and then fell back down to 9400. 4hr stochastics is trending down and I think it will fall back down to its 50% Fib line on the daily chart before shooting back up. Daily stochastics is starting to head out of oversold territory which indicates more upward movement to come. I’m going to short the pair if it can break its 50 SMA on the daily chart and set my target for the 50% Fib line.

Trade Idea:

Short at 9370; Stop Loss= 9400; Target= 9340; Target 2= 9300

USD/CHF

The Swissy made new highs once again and extremely ignored the resistance at the 100 & 200 SMA. Both daily and 4hr stochastics are in overbought territory and technically speaking this is good indication to sell the pair. I think the Swissy will end up falling right back to its former resistance point at the 100 & 200 SMA which is anywhere between 2350-2370.

USD/JPY

The Yen once again surprised me as it rallied to 119.50 again. 4hr stochastics is overbought so I think the pair will fall to 119.00 in the short term. Daily stochastics was trending down but has now crossed back up. This is giving me a mixed signal for the medium term direction.

Conclusion:

With 2 days of no fundamentals, the market is looking for some kind of catalyst. The trade balance tomorrow could be a nice market mover especially if it’s lower or higher than the consensus.