The Dollar making a comeback?

Recapping the Majors

EUR/USD- The Euro couldn’t maintain its momentum and ended up falling from the 3650 mark and headed down to its 50 EMA on the 4hr chart at 3583 before moving back up to around 3600. The Euro has been hanging around this level for a while and has shown overbought indications for quite some time now. Today may be the start of the Euro fall.

Result: The Euro lost its momentum today as it fell to the dollar from 3650 and ended back at 3600.

GBP/USD- After having a hard time breaking the 2.0000 support line, the Dollar was able to push the Sterling back down to 1.9900. The pair had been testing support at the 2.0000 for quite some time and the pair has finally started to move. Today’s move may be an indication of future drops in the Sterling, similar to when it dropped from the 2.0100 level fifteen years ago.

Result: The Dollar finally picked up some momentum as it was able to push the Sterling back below 2.0000 down to 1.9900.

USD/CHF- For the 2nd straight day, the Dollar rallied against the Swissy. The pair had fallen to as low as 2000 which was a critical support area but has since rallied 100 pips back up to 2100. The pair has now settled back down around 2080.

Result: The Dollar rallied for the 2nd straight day against the Swissy and moved to as high as 2100 before settling back around 2080.

USD/JPY- Finally! After consolidating just above the 118.50 mark for several days, the USD/JPY rallied past 119.00 and broke the 119.50 mark. The pair had stayed quiet for the past few days and it is now showing life again. Today’s breakout could be an indication for the pair to continue this rally.

Result: The Dollar rallied hard against the Yen, breaking the range, and moving above the 119.50 mark.

Chart Analysis: What’s going to happen next?

EUR/USD

Once again the Euro could not sustain its momentum at the 3650 level and fell back down to 3600. I still have a medium term bearish bias since Daily stochastics have shown an extended period of being in overbought territory, but 4hr stochastics are now heading into oversold territory which means we might see the pair pause in the short term. I think the pair will hold steady just around the 3600 area and may move to 3620, but if we see a break of the 4hr EMA at 3580, I would expect the pair to move down to 3550 or even 3500.

GBP/USD

After all my ranting, the Cable finally decided to listen to me and broke the 2.0000 support, falling all the way down to 1.9900. I still think the pair has a long way to fall but we may see a slight retracement now that the 4hr stochastics are in oversold territory. Look for the pair to either pause or move up to around 9950 before continuing its drop.

USD/CHF

Well the Swissy did move up like I said it would yesterday and it actually got up to 2100 before falling back down to around 2080. Daily stochastics are still not giving me a clear picture so I’m not sure where the pair will go in the medium term but 4hr stochastics are in overbought territory now. Look for the Swissy to move down towards 2050.

USD/JPY

Finally this pair is moving. I said that if it broke out of one of its ranges, then the pair would most likely continue in that direction. Well the pair broke out of its upper range and continued to move up to 119.50. Daily stochastics are now trending up but 4hr stochastics are in overbought territory. Look for the pair to retrace slightly around the 119.50 mark before it continues to shoot up towards 120.00.

  • BogusRogus

    On USD/JPY if you drop a trendline on the daily chart starting on Feb 12 peak and running through feb 23 peak, you then catch exactly the next peak on 16 and 17 Apr. This trend line was just broken to the upside on the 26th and held the 27th. With Most of JPY out on holiday we probably don’t need to worry about jaw boning comment at 120 until they get back in during the next week. Could be a nice week to stay long USD/JPY – just not going to overstay my welcome and I’ll be out by next friday.

  • BogusRogus

    On USD/JPY if you drop a trendline on the daily chart starting on Feb 12 peak and running through feb 23 peak, you then catch exactly the next peak on 16 and 17 Apr. This trend line was just broken to the upside on the 26th and held the 27th. With Most of JPY out on holiday we probably don’t need to worry about jaw boning comment at 120 until they get back in during the next week. Could be a nice week to stay long USD/JPY – just not going to overstay my welcome and I’ll be out by next friday.