Is the Euro topping off?

Here is a technical summary of what happened today in the majors:

EUR/USD– Last Thursday I talked about how I had mixed feelings on the Euro because it had closed above 3200 (big resistance level) for two straight days, but it the technical indicators were showing some signs of an exhausted rally. Well on Friday the Euro did end up rallying to 3350 and closed slightly above 3300. Today, the Euro pretty much stayed put which to me, seems like the market is pondering its next move.

Result: The Euro paused today and only had a slight loss to the Dollar today. The Euro is still undecided at this moment.

GBP/USD Finally the Cable has made some progress. After a bunch of range trading the Sterling finally made a decent rally. Granted we still had big spikes but at least we are seeing the pair actually drift in one direction. Today, the Sterling followed its pattern and made another rally against the Dollar but cooled off later in the day which formed yet another spike in today’s daily candle.

Result: The Sterling is making slow progress against the Dollar but huge spikes in the daily candles indicate that there is still some indecision in this currency pair.

USD/CHFOn Friday the Swissy made yet another push against the Dollar and pushed down to as low as 2029 before the Dollar could regain some ground. Today, the Dollar has further pushed higher against the Swissy and is back above 2100. Last week the Swissy dominated the Dollar and today the Dollar has finally stood its ground. Will this week be the week for the Dollar verses the Swissy?

Result: The Dollar rallied back hard today against the Swissy. Will it continue its run or will the Swissy continue dominating the Dollar like it did last week?

USD/JPY The Dollar made a nice rally against the Yen today and has been slowly inching its way higher since it hit a major low at 115.14 back on March 4th. This gradual support could indicate that the Dollar is going to continue to rally against the Yen although it might be a slow process.

Result: The Dollar opened up the week by making a nice rally against the Yen.

Chart Analysis: What’s going to happen next?

EUR/USD

So last week I felt that the Euro rally might be overextended but at the same time felt that there could still be some juice left in the Euro rally. Well now that the Euro did end of rallying to 3300, it really looks like the Euro run might be done for now. Daily stochastics are in overbought territory while 4hr stochastics are trending down (although the fast stochastic line is flattening out). I don’t see any momentum shifts for a downward movement yet so I’m not sure about entering short yet on the pair but I do have a bearish bias at the moment. I think we’ll see the pair fall to its 38% fib line on the daily chart within the next day or two.

GBP/USD

The Cable has finally been making some kind of directional movement as it has been inching higher since the middle of last week. Daily stochastics are still trending up and are not yet in overbought territory which tells me that we could see more upside movement for a little while longer. However, 4hr stochastics have crossed down which means we might see some short term downward movement. We do face resistance at the 50 EMA and 100 SMA on the daily chart so this will be the level(s) to break if we are to see a really good Cable rally. I think we’ll see the Cable move to down to its 38% fib line followed by another run up to its 50 EMA and 100 SMA on the daily chart.

USD/CHF

I’ve had two really good trades on the Swissy this month but at the moment I’m not sure where it will go next. 4hr stochastics are trending up and are beginning to enter overbought territory. Since its not completely in overbought territory, we may see the pair rally a little more before it retraces down. Daily stochastics have been trending down but are currently stuck together which doesn’t give me a real clear picture as to where the pair could go in the medium term; but seeing as how the 4hr stochastics are almost in overbought territory, the daily stochastics could continue to move down into oversold territory. Look for the pair to hit its 50 EMA on the 4hr chart and bounce back down towards 2100.

USD/JPY

The USD/JPY has been gradually working its way up but it has met strong resistance at its 200 SMA. For 3 days the pair has been unable to close above it which is not a good sign for the dollar bulls. To top it off, 4hr stochastics are in overbought territory. I think we may see the pair fall to around 117.00 tomorrow but daily stochastics are still trending up which means we could see the Dollar continue its rally against the Yen. The real test is whether or not the pair can break above its 200 SMA on the daily chart. If we see that happen, we could see some pretty big moves to the upside.