Recapping the Majors
EUR/USD– The Euro started off on a rally early on in the day as it rose up to 3500. However, the Euro dropped off later in the day and eventually made its way back down to 3450. The Euro has been in range mode the past few days as it has been bouncing between 3400 and 3500.
Result: After an early Euro rally, the pair finally settled down and the Euro ended up staying put at 3450.
GBP/USD- The Cable quickly shot up to 9900 today but pulled a 180 and ended up falling 100 pips to 9800. The Cable has started to resume its downtrend after it shot up and hit 9900 on May 22nd. These recent falls fit into the long term down channel that the pair has been forming since hitting its 15 year high at 2.0131 on April 17th.
Result: The Sterling rally early on but the Dollar took control and pushed the Sterling lower for the 4th straight day.
USD/CHF- The Dollar finally fell hard against the Swissy as it dropped to 2200 before retracing back up to around 2250. The pair had been hanging around resistance at the 200 SMA on the daily chart and the 2300 level for several days and finally gave away as the pair fell today.
Result: The Dollar fell hard against the Swissy as it dropped 100 pips down to 2200 before finally moving back up to around 2250.
USD/JPY- The Dollar once again stayed quiet against the Yen as it floated in between 121.00 and 122.00 and is now trading just above 121.50 at around 121.60. The pair has been showing signs of exhaustion as the pair has been rallying higher since March 4th.
Result: The Dollar once again stayed flat against the Yen as it stayed right above 121.50 without making any significant gains.
Chart Analysis: What’s going to happen next?
The Euro seems to have found support around the 3400 level and I think we will see some kind of bounce at that level. Currently the pair is trading at 3450 and 4hr stochastics are trending down which could indicate a short term move down to 3400. Daily stochastics are in oversold territory and are trending up which means that the 3400 support level could hold and we should see the Euro rise from there.
The Cable is forming a very nice looking downward trend channel on the daily chart. Both 4hr and daily stochastics are trending down which indicates that more downward movement may be set to come but the Cable has found support at its 50 EMA on the daily chart. If the pair can break its 50 EMA at 9790 then look for the pair to continue to drop to at least 9750.
The Swissy dropped to 2200 where it found support today and has risen back up to 2250. Daily stochastics are still trending down nicely which makes me think that we’ll see the pair drop to 2200 again. However 4hr stochastics are trending up which could indicate a short term bullish movement. I think we’ll see the Swissy float around its 100 SMA which is around 2260 before it continues to fall back down to 2200.
My analysis for the USD/JPY is still the same as always….it should be dropping soon! Daily stochastics has been showing an extended period of being in overbought territory and 4hr stochastics are trending down. However the Dollar has been in a long term rally and still keeps showing signs of life. It looks as though we may be seeing some exhaustion now and I would expect the Dollar to fall down to 121.00 within the next day or so.