Recapping the Majors
EUR/USD- The Euro finally cooled off a bit today as it finally fell from the 3600 mark and settled back down to 3550. The pair found support at the 50 EMA on the 4hr chart and has since traded slightly above it around 3560. The pair started to fall last Friday after reaching a high of 3636 and has since been on a decline.
Result: The Euro marked its 2nd day of weakening against the Dollar as it cooled off from the 3600 level and moved down to 3550.
GBP/USD- It was a pretty quiet day for the Cable as the pair simply moved from 2.0000 to 2.0050. Ever since peaking at 2.0131, the Cable has cooled off and has been trading right around the 2.0000 mark. It seems as though the market is still debating whether or not to continue moving down or make another push to 2.0100 and beyond.
Result: The Sterling pretty much stayed put at around 2.0000 and seems like it is still "thinking" about where to go next.
USD/CHF- The Dollar continued its run against the Swissy as it once again moved higher today. The Dollar got as high as 2126 before moving just below 2100 but this marks the 3rd straight day the Dollar has rallied against the Swissy. Last week the pair got as low as 2000 but bounced up sharply and has been moving up ever since.
Result: The Dollar continued its run against the Swissy as it rallied higher for the 3rd straight day.
USD/JPY- This pair pretty much stayed put today as it ranged between 118.22 and 119.00. Although the pair made an extreme high and low, it ended up moving right near its open at around 118.60. Today is the 2nd day the pair has shown consolidation ever since it moved sharply from 119.81 to 117.60 from April 12-18th.
Result: The Yen pretty much stayed put for the 2nd straight day.
Chart Analysis: What’s going to happen next?
I said last week that I was bearish on the Euro and the market followed through with my sentiment. 3600 is a very extreme level for the Euro and I think it will take something major to push it any higher. The pair cooled off and moved down to 3650 and I think we will see the pair continue to fall. 4hr stochastics are in oversold territory which means we could see some slight movement to the upside but daily stochastics are in overbought territory and are trending down which means that we are likely to see the pair fall more in the medium term. I think we could see the Euro hover right around 3580 and maybe move back up to 3600 but I think the pair will fall from there and we could see a bigger fall than today where the Euro could possibly go to 3500.
The Sterling is moving as if the market doesn’t quite know what to do with it yet. Remember how I said the 2.0100 mark was a 15 year high and that the Sterling had fallen from that level the last time. The market did the same thing this time around but has paused at the 2.0000 mark. It seems as if the market is debating whether or not to repeat history and continue to bounce down or if it will make history and take out that 2.0100 mark. The daily stochastics are still in overbought territory and are trending down which leads me to believe that we will most likely see this pair continue to fall. Look for the pair to move to 1.9950 and maybe even 1.9900.
Ever since the Swissy got down to 2000 it has been rallying nicely. Today the pair pierced through 2100 but has moved just below that level and looks as though it may stay there the rest of the day. Daily stochastics are trending up and are just now leaving oversold territory which means we are probably going to see the pair continue to move up in the medium term. However, 4hr stochastics are trending down and with all the the upward movement the past couple of days we could see some retracement in the short term. Look for the pair to move down towards 2050 before continuing its upward trend.
The Yen has been staying put for the past couple of days and it looks as though it may rally back up. You can see that we have a long upward channel forming and both 4hr and daily stochastics have crossed up. If the pair can break 119.00 then I would expect it to continue up to 119.50.