Recapping the Majors
EUR/USD– The Euro rallied for the 2nd straight day as it broke through 3750 and reached a high at 3786. However the Euro couldn’t sustain its momentum and ended up falling back down near the 3750 mark.
Result: The Euro rallied for the 2nd straight day but failed to reach 3800 and instead it settled around 3750.
GBP/USD- The Sterling continued its hot streak as it once again made a new high by piercing the 2.0350 mark. The Sterling has been rallying strong for the past 3 days and the question now is whether it can maintain this momentum at such a high level or not.
Result: The Sterling rallied strong for the 3rd straight day, making another new high around the 2.0350 mark.
USD/CHF- The Swissy dropped early on as it fell to 2000 but found strong support there and proceeded to rally back up to around 2050. The Swissy has been dropping for the past 3 days but today’s price action suggests that we may see some upward retracement in the near future.
Result: The Swissy dropped early on to 2000 but found support and reversed back up to around the 2050 mark.
USD/JPY- The Dollar looked like it was in for another tough day as it fell another 100 pips down to 121.00. However, the pair quickly reversed and ended up settling ABOVE its open at around 122.10. Today’s movements suggest that a reversal may be in store for the USD/JPY.
Result: The Dollar fell hard early on as it dropped 100 pips to 121.00 but found its strength and rallied slightly higher than its open at around 122.10.
Chart Analysis: What’s going to happen next?
Well the Euro pushed a little higher than I thought but it still seems to have found some resistance at the 3750 mark. Both 4hr and daily stochastics are in overbought territory which suggests that we should see the pair drop sometime soon. Currently the pair is trading around 3760 and I would look for the Euro to drop to 3700 sometime tomorrow.
The Sterling is still killing the Dollar right now as it made yet another 15 year high today. The pair seems to have stopped dead in its tracks at around 2.0350 and I would expect this resistance level to hold and I would watch for the pair to drop back down to 2.0300 in the near future.
The Swissy dropped down to 2000 like I said it would yesterday as it completed the head and shoulders pattern. Now it seems that the pair has found support at that level and may be headed up in the short term. Both 4hr and daily stochastics are in oversold territory which confirms my bullish bias. Currently the pair is trading at around 2040 and I would watch for the pair to continue rising towards 2100.
The Yen broke support at its 50 EMA on the daily chart early on and did end up falling down to 121.50 early on in the day and continued to drop to 121.00 but found strong support and actually closed above the support level and is now trading above 122.00. Although daily stochastics have crossed down, 4hr stochastics are trending up and still have alot of room before hitting overbought territory. Look for the pair to reach 122.50 sometime tomorrow.