Here is the technical summary of what happened today in the majors:
EUR/USD– The Euro never stood a chance today as the Dollar pushed it down to as low as 3071. The Euro finally found support at its 50 EMA on the daily chart and has made a slight retracement back up. It is currently hanging around 3090. The Euro closed 98 pips lower compared to Friday’s close.
Result: The Dollar pulls out another overwhelming victory against the Euro!
GBP/USD- Just like the Euro, the Sterling took a major beating from the Dollar today. The Sterling dropped to as low as 9183 before finally easing back up. The pair ended up closing at 9221 which was 209 pips lower than Friday’s close.
Result: The Dollar easily wins its 3rd straight battle as it pummels the Sterling down even lower. The Cable has dropped 330 pips since last Wednesday!
USD/CHF- The Swissy started off shaky as the the it initially made a slight gain against the Dollar. However, later on in the day, the Dollar rebounded and ended up making a nice gain against the Swiss Franc. The Dollar ended up closing 37 pips higher from Friday’s close.
Result: The Dollar edges out the Swissy in a hard fought battle.
USD/JPY- The Yen is really on a roll right now and gave the Dollar another nice butt whooping today. Last week I talked about how the Yen could go back to where it was when the Dollar first started making that nice rally against it. It seems as though the Yen is falling through with this idea and got to as low as 115.14 today.
Result: The Yen gives the Dollar another solid butt kicking! The Yen has gained 177 pips against the Dollar since last Wednesday!
Chart Analysis: What’s going to happen next?
The Euro looks poised to continue falling toward its 61% Fib line on the daily chart. Daily stochastics are trending down nicely and have plenty of room to go before reaching oversold territory. However, the pair faces support around 3050-3070 since that is where the 200 SMA on the 4hr chart and the 50 EMA on the daily chart are at respectively. If the pair can break this support area, watch for it to fall down to around 3000. The 61% Fib line is at 3016 but it could spike down to 3000 before turning up.
The Cable has been trending down nicely and there is no immediate support in site except for the fact that it’s hanging around a 00 level at 9200. Daily stochastics are still trending down but are in oversold territory now and 4hr stochastics has been in oversold territory for an extended period now. My guess is that the pair will either retrace up off of 9200 since there are no technical factors that would support the move to continue to the downside, OR it could have one more day of downward momentum since the daily stochastics are still trending down. We’ll have to see what happens tomororw in order to get a clearer picture on what the pair will do next.
The Swissy has been stalling in between the 2150-2200 area for a few days now and I think this is a sign that the pair will retrace back up. The pair previously fell from 2400 to 2150 from February 21-26, and since then the pair has not made any more significant pushes downward. Daily stochastics are trending up and are just leaving oversold territory and 4hr stochastics are also trending up. The pair does face resistance at its 50 EMA on the 4hr chart which is currently around 2250 but other than that I think the pair will make its way towards its 38% Fib line which is around 2290.
Buy USD/CHF at market (around 2204); Stop Loss= 2100; Target= 2300
This trade may take a few days for it to mature so be patient 🙂
Ok so technically, the USD/JPY is giving me indications that the pair will rally but we all know what happened the last time this happened. During that whole Dollar rally versus the Yen, I had many indications that the pair would fall but the pair continued to trend up. This could be the case again since this recent Yen rally has been very strong. I see a bullish divergence on the 4hr chart and daily stochastics are also in oversold territory which is telling me that the pair will rise. 115.00 is also a very strong psychological support so my bullish bias has some pretty good arguments. I’m still not sure about the timing so I’m going to wait before I make a move but I am paying close attention for any opportunties to arise.