USD/JPY falls short once again from 122.00

The dollar lost some ground today with the higher trade deficit. But even before the report, the dollar was already falling. We haven’t really seen a clear trend in a while (except for the fall of the Yen) so it will be interesting to see when we’ll see another strong move. Let’s take a look at today’s action and see if there are any trade possibilities.

Chart Analysis:

EUR/USD

Yesterday I talked about the triple top that the Euro formed around the 3040 level. My short trade idea yesterday was based on the idea that the pair would fall down to 2900 like it had done the previous 2 times it bounced off of the 3040 area. This was not the case today and the Euro has ended right back up at its 38% Fib line on the daily chart. Could this be the time the Euro finally breaks this resistance? Seeing as the pair didn’t even make it to 2900 this time, I think there is a good chance the pair will finally break past the 3040 area and move on to 3100.

GBP/USD

The Cable did end up falling to 9400 like I said it would yesterday. Darn! Why didn’t I trade this pair instead of the Euro? I just couldn’t find a good entry point so I’m ok with missing out on this trade. Right now the pair is right in the middle of "no-mans" land. What I mean is, it’s not near any support or resistance areas. 4hr stochastics have crossed up while daily stochastics are still trending down, having just started to enter oversold territory. So you can see I’m getting a bunch of mixed signals. One thing you should pay attention to is the fact that today’s daily candle made both extreme highs and lows but ended up closing right near its open price. This is a sign of indecision and could indicate that the pair will reverse back up tomorrow. If this is the case then I would expect the pair to travel back up to its 50 EMA on the daily chart .

USD/CHF

The Swissy had me fooled. This time I actually thought the pair would continue higher than 2550 but once again, the pair has retreated back below 2500. The pair may continue to drop to 2400 but I’m not sure if the pair will drop any lower than that. Remember, there are 3 moving averages right below the 2400 level which make it a very strong support area. Once again, I don’t have a clear picture on this pair and will sit out for now.

USD/JPY

The Yen dropped nicely again after reaching 122.00. This is a big psychological resistance area and it held firm today. The Yen may continue to drop since we had a such a nice run up but it’s facing support at its 50 EMA and 100 SMA on the 4hr chart. 4hr stochastics are in oversold area and daily stochastics are still trending up so I’m not 100% convinced the pair will just do a straight drop. We may see little rallies as the pair continues to edge down. I’m thinking we might see a run back up to 121.50 followed by another move down.