Here is a technical summary of what happened today in the majors:
EUR/USD– The day started out very quiet and it looked as though this pair was going to stand still, but at the last minute the Euro pulled a sneak attack and rallied higher against the Dollar. The Euro closed 57 pips higher than yesterday at 3179.
Result: The Euro pulled a late round knockout against the Dollar. This is the 2nd day the Euro has gained against the Greenback.
GBP/USD- The battle between the Sterling and Dollar came pretty much to a stand still today. The Sterling did manage a small victory, closing 20 pips higher than yesterday but at the time of this post, the Dollar seems to be making an early surge.
Result: It was pretty much a draw between the two currencies. However it looks like the Dollar is making an early surge against the Sterling as I write this post.
USD/CHF- Following the Euro’s lead, the Swissy pushed the dollar lower in a late surge. The day was pretty quiet until the finally the Swissy managed to push the Dollar to as low as 2165. The pair ended up closing 75 pips lower than yesterday at 2168.
Result: After 2 days of gaining against the Swissy, the Dollar finally lost a battle against the Swissy.
USD/JPY- The Yen once again continued its assault against the Dollar and pulled out a late victory. As I am writing, the Yen is continuing to surge against the Dollar. The pair ended up closing 62 pips lower than yesterday at 115.98.
Result: After a brief stall, the Yen reinforced itself and once again overwhelmed the Dollar!
Chart Analysis: What’s going to happen next?
With today’s rally the Euro is really looks like it’s ready to fall back down. 4hr stochastics are in overbought territory and looks like it could form a bearish hidden divergence. Daily stochastics were trending down previously but today’s rally has caused them to cross up. However, they never reached oversold territory so the pair could still fall. I think we’ll see the pair fall towards its 38% Fib line.
The Cable didn’t quite make it to its 38% Fib line (missed it by 12 pips) and has since retraced back down towards 9300. 4hr stochastics are cabling so it’s hard to get a clear direction but daily stochastics are still trending up and have just left oversold territory so we could still see the pair make another run towards its 38% Fib line. Look for the pair to bounce back up either tomorrow or Friday.
My Swissy trade is now in the negative but I am still holding on to it. 4hr stochastics are heading into oversold territory so I think our trade will still be ok and hopefully the market will rally before it hits my stop loss. Today’s drop puts the Swissy right back in its range again. The pair has been unable to make any clear directional moves over the past few days and it could still go either way. I’ll continue to monitor my trade and post any updates. For those of you who missed my trade idea, this is what I posted:
Buy USD/CHF at market (around 2204); Stop Loss= 2100; Target= 2300
The Yen is once again heading towards its major psychological support at 115.00. Daily stochastics are still in oversold territory and 4hr stochastics are heading into oversold territory. 115.00 is going to be a very tough level to break so you should watch it closely. Currently the pair is at 115.60 and it looks as though the pair is headed towards 115.00 once again.