Euro rallies again, but still unable to hit 1.4200

EUR/USD

So of course the Euro rallied again today (what’s new?), but once again it wasn’t able to reach 1.4200. So you might be asking what I think of this pair now. Well, if you’ve read any of my posts the past week or so, you’ll know that I am still BEARISH on this pair. Today’s unsuccessful attempt of the Euro to hit 4200 makes me even more confident that the pair will drop. 4hr stochastics are trending down (although its been rocky) and daily stochastics are still in overbought territory. Look for the pair to move down to 1.4100 (which if you paid attention, is what I said yesterday).

GBP/USD

Ok so I was wrong about the Cable, and it seems like it still hasn’t made up its mind yet. The pair traveled back up to around 2.0250 and it may continue to drift a little higher. Both 4hr and daily stochastics are trending up but are nearing overbought territory. The pair may float around 2.0250 or even to 2.0300 but we should see the pair make its way down after that.

USD/CHF

The Swissy did end up moving up higher but it didn’t quite make it to its 50 EMA on the 4hr chart at around 1750 like I thought it would. There may still be hope though as 4hr stochastics are still trending up but are nearing overbought territory. Daily stochastics are also in oversold territory so I’m still pretty bullish on the pair. For now I will wait and see what happens next before making my next move.

USD/JPY

The Yen did alot of moving but it didn’t really get anywhere. Currently it is trading at around 115.63. 4hr stochastics are trending down while daily stochastics have just crossed up. So you can see, its still not really clear where the pair is going. Based on the 4hr chart, we could see a short term drop to its 200 SMA but anything could happen after that.

I’m not really big into fundamentals but I feel that they are important to discuss. In this section I will be posting fundamental tidbits that I find interesting from various sources. If you find an article that you think would benefit everyone, please email me (Big Pippin) with your username, the article, and a link to where members can read the entire article.

Now onto the Fundamentals:
  • Housing Data will be extra important with the 50 BPS rate cute:
    • Let’s not blow off the housing data… After a 50 BPS rate cut last week, and the dollar’s fall VS the euro, I think the housing data will be very important.
  • The Chinese Yuan and what it could mean for the Dollar’s future:
    • And of course, if the Chinese do finally allow a much faster increase in the value of their currency, their need for holding US dollar reserves will likely shrink (i.e. much of the reserve build comes from the pegging process). And dollar for dollar they can buy more oil with a stronger currency (and every other major raw material they input—including pigs). At minimum, if this plays out, it could be yet another sentiment hit to the dollar.

 

  • khashood

    Hello:

    At some point EUR/USD will give us a fibo retrace.
    But where is the turn-around level? That’s the trillion dollar question.

    I think we’re in the same situation, I don’t know if we can call it a technical situation, as in late Jun to early August this year, when EUR/USD was a raging bull, taking short consolidation breaks for 2-3 days before charging up again. The consolidation periods and their rages hardly exceeded 60 pips as we see what’s happening now.

    At least with Cable you can use the psychotic swings to your advantage and get out of a short position with little damage done.

    This is another EUR major bull run, and the shorts currently in the market who are tempted to add to those positions with tight stops are only causing the market to go up higher.

    Thanks for the good work. I just thought I’d throw in my 2 euros!

  • khashood

    Hello:

    At some point EUR/USD will give us a fibo retrace.
    But where is the turn-around level? That’s the trillion dollar question.

    I think we’re in the same situation, I don’t know if we can call it a technical situation, as in late Jun to early August this year, when EUR/USD was a raging bull, taking short consolidation breaks for 2-3 days before charging up again. The consolidation periods and their rages hardly exceeded 60 pips as we see what’s happening now.

    At least with Cable you can use the psychotic swings to your advantage and get out of a short position with little damage done.

    This is another EUR major bull run, and the shorts currently in the market who are tempted to add to those positions with tight stops are only causing the market to go up higher.

    Thanks for the good work. I just thought I’d throw in my 2 euros!

  • BigPippin

    Hi Khashood- Thanks for your input! I definitely agree that anyone trading short with tight stops would be getting killed right now. Thank goodness for scaling :) Cmon Greenback!! Happy trading!

    -BP

  • BigPippin

    Hi Khashood- Thanks for your input! I definitely agree that anyone trading short with tight stops would be getting killed right now. Thank goodness for scaling :) Cmon Greenback!! Happy trading!

    -BP