Recapping the Majors
EUR/USD– The Euro has been somewhat less than exciting as it once again stayed rangebound between 3650 and 3700. The pair looked like it was going to retrace back up after it hit support at its 50 EMA on the daily chart at 3600 but has hit a wall around the 3700 mark.
Result: The Euro made a slight gain, bouncing off of 3650 but was unable to penetrate the 3700 level.
GBP/USD– The Sterling took a quick nosedive after hitting the 38% Fib line yesterday but seems to have found some strength again as it is once again testing that resistance point again. The pair started the day out at around 2.0300 and proceeded to pierce the 2.0350 mark and is now treading right at the 38% Fib line on the daily chart at around 2.0360.
Result: The Sterling rallied slightly today against the Dollar as it found support at the 2.0300 mark and is now testing the 38% Fib line resistance for the 2nd time in 3 days.
USD/CHF– The Swissy is still in choppy waters right now. The pair once again failed to break the strong 2000 support level and is once again hovering just above it at around 2030.
Result: The Swissy once again stayed flat as it continued to hover just above the support of 2000 and ended up closing out at around 2030.
USD/JPY– The Dollar rallied for the 2nd straight day as it broke through 119.00 and is now trading at around 119.20. The Dollar found support for the 3rd time since July 26th at the 118.00 mark and has once again rallied back. The previous two times, the Dollar was unable to close above 119.00. Will today’s move above 119.00 trigger a bullish run?
Result: The Dollar rallied for the 2nd straight time against the Yen as it broke past 119.00 and ended the day at around 119.20.
Chart Analysis: What’s going to happen next?
Back on Tuesday I suggested that the Euro might fall to 3650 and it did just that. Since then the Euro has regrouped and has started to signs of another rally. Both 4hr and daily stochastics confirm my bullish sentiment and if you see some good price action above 3700 then I would look to go long and set your sights on the 3750 mark.
On Tuesday I also said that the Cable might fall due to hitting its 38% Fib line resistance and boy did it fall! However, later in the day the Sterling picked up steam and proceeded to rally right back where it opened for the day. Today the Sterling continued its bullish run as it once again rallied to its 38% Fib line at around 2.0360. I think this time around we may see the Cable continue to push through. Both 4hr and daily stochastics confirm my bullish sentiment and I would look for the pair to reach 2.0400 or if it moves really fast, look for it to go to as high as the 61% Fib line at around 2.0470.
Wow this pair is really just a sitting duck. No one seems to want to push this pair in one direction or another. Although the pair has been trading sideways I am still bearish on it and I expect to see a big drop if the Swissy breaks below that pesky little 2000 resistance level. If the pair can do that then I would watch for a move all the way down to 1900.
The Dollar broke through 119.00 today which is a good sign for Dollar bulls. The past two times the pair bounced off of the 118.00 support, the Dollar was unable to go any higher than 119.00 so today’s move is significant. Currently the pair is trading at around 119.15 with both 4hr and daily stochastics trending up (4hr stochastics just entered overbought territory). I expect this pair to continue traveling to 119.50 as that is where the 50 EMA is on the 4hr chart and it is also where the 200 SMA is on the daily chart which makes it an excellent place to take profit.