Here is a technical summary of what happened today in the majors:
EUR/USD– Apparently the Euro could only hold the Dollar for a couple of days as it fell against the Greenback today. The Euro fell to as low as 3115 before pushing back a little. The Euro ended up closing 48 pips lower than yesterday at 3132.
Result: The Dollar fights back after losing 2 straight days against the Euro and pulls out the victory today.
GBP/USD- Just like the Euro, the Sterling was unable to complete a 3rd straight victory over the Dollar. Instead, the Dollar made a small rally against the Sterling and ended up closing 46 pips lower than yesterday at 9290.
Result: The Dollar overcame a 2 day loss and made a small victory against the Sterling.
USD/CHF- After bringing the Dollar lower yesterday, the Swissy was unable to keep its momentum and lost a big battle to the Dollar today. The pair had been ranging but todays move looks like it could be the beginning of a Dollar rally. The pair closed 103 pips higher than yesterday at 2270.
Result: The Swissy suffered a major defeat against the Dollar today!
USD/JPY- The Dollar’s strong force carried into the Yen as it rallied to as high as 117.47 and ended up closing 100 pips higher than yesterday at 117.02.
Result: The Dollar wins a clear battle against the Yen!
Chart Analysis: What’s going to happen next?
Well the Euro did end up falling like I thought it would today and I think we could see it fall some more. 4hr stochastics are still trending down and aren’t in oversold territory yet. Daily stochastics are indecisive right now because they are right in the middle of the overbought/oversold territories. Look for the Euro to continue to fall to at least its 38% Fib line. If there is a lot of momentume, the pair could continue even further down to its 200 SMA on the 4hr chart around 3070. Coincidentally enough, this also happens to be where the 50 EMA is on the daily chart.
The Cable has been moving very ugly recently. On the 4hr chart, the price has been bouncing up and down for the past two days. 4hr stochastics are trending down which indicates that the pair could still drop but the daily stochastics are indecisive right now. They haven’t fully fallen into oversold territory and for a couple of days it seemed like the stochastics would bounce up. However, now it looks like the stochastics could resume trending down and actually make it into oversold territory. I have a feeling we’ll see the pair fall to at least 9250 because 4hr stochastics are trending down and have a long ways to go before reaching oversold territory.
My Swissy trade came sooooo close to hitting its target but the pair just didn’t have enough juice to make it to 2300. I have moved my stop to 2350 and am going to continue holding until the pair moves higher. The pair actually hit resistance at its 100 SMA on the 4hr chart which is why we didn’t see it move any higher. Daily stochastics are still trending up nicely so I think the pair can continue higher but 4hr stochastics are heading into overbought territory which means we could see a little retracement first. Hopefully it doesn’t retrace too far and we’ll be able to catch the next rally. If the pair hits 2300 I’m going to continue holding and adjust my stop to 2270 and set my target for 2330 which is where the 50 EMA and 100 SMA are on the daily chart. For those of you who don’t know what I’m talking about here was my original trade idea:
Buy USD/CHF at market (around 2204); Stop Loss= 2100; Target= 2300
*Update- Move stop to 2250; If price hits 2300 move stop to 2270 and set final target for 2330.
The Yen once again shyed away from the 115.00 level and the Dollar made another nice rally. The pair met resistance at its 50 EMA on the 4hr chart and is now hovering around 117.20. Daily stochastics are trending up nicely and are still near oversold territory so it looks like we could see more upside movement in the medium term. However, 4hr stochastics are in overbought territory which indicates that we might see some short term retracement before the pair makes that next rally. Look for the pair to fall to around 116.50 and then bounce back up. However if the pair doesn’t fall at all and breaks its 50 EMA resistance on the 4hr chart (currently around 117.40) then look for the pair to make a run towards 118.00