Dollar stands still as markets decide what to do next

Recapping the Majors

EUR/USD– After falling to 3550, the Euro rallied once again and avoided further losses to the Dollar as it surged back to 3600. The pair had been falling for 3 straight days after it reached resistance at 3650 and bottomed out at 3550 and is now trading in the middle of the range right at 3600.

Result: The Euro rallied nicely against the Dollar today as it surged back to 3600.

GBP/USD The Sterling rallied back above 9900 on Friday as it surged higher, closing at 9930. The pair again rallied early on today, moving as high as 9974 but couldn’t hold its momentum and ended up falling back down to 9930. The pair has been slowly moving lower after it reached a 15 year high at 2.0131 back on April 17th.

Result: The Sterling rallied early but ended up closing right back where it started the day at around 9930.

USD/CHFThe Swissy once again found resistance at its daily 50 EMA and fell hard on Friday, going from 2164 down to 2100. Today the pair pretty much stayed still as it briefly fell below 2100 but ended up closing above it at around 2108.

Result: The Dollar fell early on but managed to rally back and ended up closing right near its open at around 2108.

USD/JPY On Friday, the Dollar fell to 120.00 after the pair had reached a high of 120.45. Today the pair pretty much stayed still and closed slightly above 120.00 at around 120.05.

Result: The Dollar pretty much stayed still today as it simply hovered above 120.00.

Chart Analysis: What’s going to happen next?

EUR/USD

After hitting 3650, the Euro fell and bottomed out at 3550 and bounced back up to around 3600. 4hr stochastics are trending down after just leaving overbought territory. Daily stochastics are trending up but never reached oversold territory which means we may see the stochastics cross back down. I’m still bearish on the pair as I feel this is an extreme level for the Euro. Look for the Euro to fall back to 3550 sometime tomorrow.

GBP/USD

The Cable made it back above 9900 but if you look at the price action over the last several days you’ll see that a nice down trend channel is forming. 4hr stochastics are trending down after just leaving overbought territory but daily stochastics are trending up. I’m still bearish on this pair and I would expect the pair to fall back down to 9850 sometime tomorrow.

USD/CHF

I see a nice bearish hidden divergence on the daily chart of the USD/CHF. We’ve also seen the pair hold strong resistance at the 50 EMA. Daily stochastics are also trending down which gives me a strong bearish sentiment. 4hr stochastics are trending up so we may see the pair move up towards 2150 but from there I would expect the pair to continue to drop to 2100 and maybe even down to 2050.

USD/JPY

120.00 is now acting as support as it was a previous resistance level for this pair. 4hr stochastics are trending up but daily stochastics are trending down and are in overbought territory. I think we may see the pair hover around the 120.00-120.50 range but in the medium term, look for the pair to drop back down to around 119.00.