The Yen Makes a Nice Rally on G7 Speculation

The dollar made a nice rally today against the European currencies but lost some ground to the Yen. This is probably due to the upcoming G7 meeting where speculators are wondering if officials will mention the current weakness of the Yen. This will probably be the catalyst that will make or break the Yen in the short-medium term.

Chart Analysis:

EUR/USD

The Euro looks like it’s headed for 2900. 4hr stochastics have been hanging in oversold territory for a longer-than-normal period but daily stochatics are still trending down nicely. I think we’ll at least see the pair hit 2900 before bouncing back up. Coincidentally, the 100 SMA is also at the 2900 level which makes it a good area for support.

GBP/USD

The Cable has been looking real ugly lately. The daily candles have had large spikes and very indecisive movement. Today the pair headed down to its 50 EMA on the daily chart before bouncing back up to 9600. 4hr stochastic are trending up and is just now leaving oversold territory while daily stochastics have crossed down. The moving averages on the 4hr chart are bunched up together which confirms the range bound movement we’ve been seeing. If you notice on the daily chart, The actual open and close prices have been relatively close to each other even though we’ve had large spikes throughout the day. I don’t know where the pair is headed next but I’m going to put an entry order on the long side if the pair happens to rally back up. I’d like to go long if the pair can break the 38% Fib line on the daily chart and target 9700. My stop will be behind the 38% Fib line. This is actually just a recycled trade from last week but it worked then and I think it will work again if the pair happens to move back up.

Trade Idea:

Buy at 9670; Stop Loss= 9640; Target= 9700

USD/CHF

The Swissy found good support today on the 4hr chart at its 50 EMA and 100 SMA. 4hr stochastics are trending down and is just now leaving overbought territory which tells me we will probably see a drop at least in the short term. I’d like to short the pair if it can break below its 50 EMA and 100 SMA and set my target for 2450. My stop will be above the 2 moving averages.

Trade Idea:

Short at 2470; Stop Loss= 2490; Target= 2450

USD/JPY

The Yen dropped nicely today and it looks like theres a good chance the pair will fall to at least 120.00. 4hr stochastics are in oversold territory but daily stochastics are still trending down with a little more room before reaching the oversold territory. The 200 SMA on the 4hr chart is right at 120.00 which makes it an ideal support area. If the pair continues to fall, it will most likely hit 119.50 which is where the 50 EMA is on the daily chart. However, if it bounces up off of the 4hr, 200 SMA, then it will probably move back up to 120.50.