The Dollar Finally Gets Taken Down!

After plenty of gains made by the Dollar, it finally got a nice butt whoopin today…..except of course with the Yen, but that’s a whole other story.

Chart Analysis:

EUR/USD

Finally, the Euro decided to step it up and push the Dollar down as it broke through its 50 EMA like it was a plastic spoon. It moved all the way up to my 2nd target at 3030 which was the 38% Fib line on the daily chart. 4hr stochastics is overbought now but daily stochastics is still trending up which means that there still might be some Euro power left. We’ll most likely see a retracement down to 3000, but then another Euro rally could be in store…this time maybe even past the 38% Fib line.

GBP/USD

Wooowee! The Cable is on a roll. Completely going against my technical analysis, the Cable pushed through 9850 like it was nobody’s business, making yet another new high. Will the Cable get to 2.00? It sure is getting closer that’s for sure! At the moment however, both the 4hr and daily stochastics are showing overbought which means we could see the pair drop. Then again, I said that yesterday and well…you know what happened. The "most likely" target I see for the short side is the 38% Fib line on the daily chart which is at 9665 and knowing the Cable, it could easily reach that. I don’t think the pair will make any new highs tomorrow seeing as how the market made more than a 50% retracement from today’s high, but you never know what could happen. Based solely on the technicals, the next move for the pair is to the short side.

USD/CHF

Well after testing the 2500 level for what seemed like forever, the pair finally reversed…and it sure did reverse hard! Now it’s found support at its 100 SMA on both the 4hr and daily chart. 4hr stochastics is reading oversold but the daily stochastics still shows plenty of room for more selling power. The 4 hr. 50 EMA is at 9450 so the pair could retrace up to that level before making another fall. If it doesn’t bounce back down from the 50 EMA then I’m sure it will try to take another stab at 2500. I’m going to go long at 2470 with a stop right below the 50 EMA and target 2500. Again, I will watch the trade like a hawk and if the pair gets close to 2500 but can’t seem to reach it, I may close my trade if it’s higher than 2490.

Trade Idea:

Buy at 2470; Stop Loss= 2440; Target= 2500

USD/JPY

Being the red-headed step child that it is, the USD/JPY did not follow the rest of the majors and simply stayed put, hovering between 121.00-121.50. It formed another doji today and daily stochastics is still overbought. So this is the part where I’m going to say that the USD/JPY is headed down……AGAIN! It’s the same ol’ story, but eventually the pair will have to come down. The Yen really needs some kind of…no wait….ANY kind of news to give it a kickstart. Once the market has even a little reason to take profit then we should see the Yen make a nice retracement. When the pair falls, look for it to hit 120.00 which is where the 50 EMA on the 4hr chart is headed.

If you’re lost, you can get your forex training on in the School of Pipsology and take lessons on chart patterns!