Here is a technical summary of what happened today in the majors:
EUR/USD– Ahh the Euro finally hit 3250 like I said it would yesterday. However, movement was still relatively quiet in the pair and the Euro only managed to make a small gain against the Dollar. Either way, this is the 2nd day the pair has closed above 3200 which was a pretty good resistance area.
Result: The Euro made its 4th (although small) gain against the Dollar today. Is the rally exhausted or is this 2nd day of closing above 3200 a sign of a continued rally?
GBP/USD– The Cable once again followed its normal routine as of late and range traded today. Reaching extremes near 9300 and 9400 the price ended up finishing out right around 9366. Although it was a slight gain for the Cable, we haven’t seen any real convincing moves from the pair which indicates that indecision is still in the air.
Result: The Sterling made a slight gain against the Dollar but still showed no signs of a clear direction.
USD/CHF– The Dollar rallied early on against the Swissy, bringing to as high as 2215 but couldn’t sustain its momentum. The Swissy then proceeded to push back and ended up bringing the Dollar down to around 2174. Today’s movement looks like a retracement from the downtrend that occurred from Monday to Wednesday.
Result: The Swissy only suffered a minor loss to the Dollar and still looks poised to bring the Greenback lower.
USD/JPY– The Dollar continued to rally against the Yen but was unable to break through its 200 SMA on the daily chart at 117.60. The pair got as high as 117.76 but failed to move any higher. Today is the 2nd straight day of a strong Dollar rally against the Yen.
Result: The Dollar flexed its muscles again and made another nice gain against the Yen today.
Chart Analysis: What’s going to happen next?
Hmmm…I have mixed feelings on the Euro right now. On one hand it closed above 3200 for the 2nd straight day, but on the other hand its going to face tough resistance at 3250. 4hr and daily stochastics are still trending up but 4hr stochastics are near overbought territory so I’m not sure if the rally will continue too much longer. My guess is that we may see a spike (even a big one) to around 3300 followed by another push by the sellers to bring the price back down to around 3250.
Once again the Cable is still not giving any clear indications as to where its going but I have a feeling that we’ll see the pair continue to rise to my target at 9450 (the area where the 50 EMA and 100 SMA on the daily chart are converging together). 4hr stochastics are in overbought territory which means we could see the price retrace down a bit but daily stochastics are starting to trend up which leads me to believe that a move to 9450 is still a good possibility. My trade was triggered and I am currently up about 40 pips but I will hold for now and not make any adjust ments yet. If you missed my post yesterday, here was my trade idea:
Buy at 9330; Stop Loss= 9210; Target= 9450
Yesterday I mentioned that the Swissy would move up to 2200 and it did just that. However, the price has moved back down and it looks like we may see a continuation of the downtrend that occurred from Monday to Wednesday. Daily stochastics are trending down and 4hr stochastics have crossed down so tomorrows movement looks like it will most probably be to the downside. Look for the pair to make another run towards 2100.
Today’s daily candle could not close above its 200 SMA which means the pair could have trouble breaking it. However, daily stochastics are still trending up which means there should still be some buyer momentum and the price could rise to 118.00 tomorrow. The contradiction is in the 4hr stochastics because they are in overbought territory right now. Right now I’m not sure where the pair is going. Watch the price action tomorrow. If it looks like the price action is in favor of the Dollar bulls then set your target for 118.00. However if it looks like the bears are the big players tomorrow, then set your target for 117.00