Recapping the Majors
EUR/USD– The Euro rallied yet again versus the Dollar but was unable to reach the 3600. The Euro made it as high 3593 before falling back down to around 3570. The pair is trading at 2 year high which puts it at an interesting area for traders as this may be a critical resistance point.
Result: The Euro rallied for the 4th straight day against the Dollar, edging itself closer to the 3600 mark.
GBP/USD- The story of the day is the Sterling. After looking like it was ready to fall, the Sterling did the exact opposite and rallied strong after a strong CPI report. The Sterling surged past 2000 and is continuing to run up. Currently the pair is at 2.0071. The last time the pair was this high was back in September of 1992! At that time, the pair bounced down from 2.0100. Will history repeat itself or will we see the Cable continue to surge?
Result: The Sterling marked its 6th straight gain against the Dollar and it also reached at 15 year high as it surged past 2.0000 and got as high as 2.0074!
USD/CHF- Continuing with the Dollar slaughter, the Swissy was able to push the Dollar down to as low as 2064 before retracing back up to around 2090. The Dollar has been slowly dropping against the Swissy since it met resistance at its 38% Fib line and 50 EMA on the daily chart at 2245. This break below 2100 could trigger a move back down to around 2050.
Result: The Dollar once again fell against the Swissy as it fell below 2100 today.
USD/JPY- After making a nice rally against the Yen yesterday, the Dollar returned its gains as it plummeted down back below the 119.00 mark. The pair is now facing support at its 100 SMA on the daily chart although it looks like the momentum may continue in the Yen’s favor.
Result: Like the rest of the majors, the Dollar fell hard against the Yen and is once again below the 119.00 level.
Chart Analysis: What’s going to happen next?
Right now the technicals are indicating that the Euro will drop sooner than later. Daily stochastics are in overbought territory while 4hr stochastics are trending up. Currently the pair is trading at 3567 and it could rise up to 3600 but I think it will have a very tough time breaking that level and we should see the Euro fall from there.
"The Sterling continues to surprise me." That is the first thing I said yesterday and it definitely warrants another use to describe today’s action. The Sterling has finally surpassed the 2.000 level after 15 years! This is extremely significant but at the same time you have to wonder if the pair can sustain this level. Back in 1992, the pair made it as high as 2.0100 but then fell hard from there. Both 4hr and daily stochastics are in overbought territory which technically means that history should repeat itself and we should see the Cable find resistance at that 2.0100 level again. The pair has also been rallying for the past 6 days which gives me a strong inclination that the pair will cool off in the near future.
The Swissy once again gained momentum as it was able to push the Dollar back below the 2100 mark. Daily stochastics are trending down while 4hr stochastics have crossed up. Currently the pair is trading at around 2090. I think it will find resistance at the 2100 level and we should see the pair fall towards 2050.
The Yen also made a strong push against the Dollar as it brought it back down below 119.00. Both 4hr and daily stochastics are trending down with the 4hr stochastics just now heading into oversold territory. The pair is currently testing resistance at the 100 SMA at 118.80 on the daily chart but I think we’ll see it move lower towards the 100 SMA on the 4hr chart which is at 118.60. In the medium term, I would expect this pair to continue to fall towards the 118.00 mark.