Recapping the Majors
EUR/USD– ZzzZZzz! Wow was this pair boring or what? The Euro did end up falling to 3300 but it shot back up and is currently trading around 3330. We’re still seeing pretty quiet price action with neither pair being able to push the other one down.
Result: The Euro slumped early on but gained its footing and rallied slightly higher against the Dollar today.
GBP/USD- Early on the Sterling made a small rally against the Dollar but lost its foothold and fell back down towards 9600. The pair has been moving rather quietly for the past few days and today was no exception.
Result: The pair pretty much stayed still with the Sterling making just a slight gain on the Dollar.
USD/CHF- The Dollar once again made a slight rally against the Swissy but didn’t quite make it to 2200. The pair has been ranging between the 2100-2200 range for the past 7 days and today was no exception.
Result: The Dollar rallied slightly higher versus the Swissy but is stuck in a range between 2100-2200.
USD/JPY- Finally some excitement! After making significant gains against the Dollar, the Yen fell back on its heels today as the Dollar rallied back to where it started yesterday at 118.00. The past 2 days have shown nice volatility but obviously we are seeing see-saw movements with no clear direction. The bottom line is that this pair is still ranging and we may have a new triangle forming.
Result: After making significant gains yesterday, the Yen fell hard as the Dollar rallied to the same spot it was yesterday….118.00!
Chart Analysis: What’s going to happen next?
Well I thought we would see the Euro fall past 3300 but apparently that wasn’t the case. Today’s price action leads me to believe that we could see the Euro rise back up to 3400 again. 4hr stochastics are trending up which supports my 3400 theory but daily stochastics are down which leads me to believe that 3400 will probably be the highest the Euro will reach before falling again. Watch for this pair to head towards 3400 followed by another drop.
I have no idea what the Cable is doing right now. We have seen it move rather quietly the past few days and I think we’ll see a big move in the near future. The Cable is normally a volatile pair so I would expect for it to make a move rather soon. Be careful though as the Cable is known for creating large spikes so don’t set your targets too far if you are a day trader. I’m still bearish on this pair as daily stochastics are still trending down and are just beginning to leave overbought territory. 4hr stochastics has also crossed down which supports my bearish bias. If the pair can break below 9600 then I would expect the pair to hit 9500. Why 9500? That is where the 50 EMA and 100 SMA are on the daily chart, and it’s also where the 100 and 200 SMA are on the 4hr chart. This makes 9500 a very likely support area.
Yesterday I said the Swissy would head to 2200 and faced minor resistance at its 100 SMA on the 4hr chart which was around 2175. Well that minor resistance actually turned out to hold strong as the pair couldn’t nudge much higher than 2175 and is currently just standing still. 4hr stochastics are beginning to trend down slightly after just leaving overbought territory which is a bearish indication in the short term. However, daily stochastics are still trending up which leads me to believe that we may still see the pair hit 2200. A possible scenario is for this pair to move down to around 2150 and then continue back up towards 2200.
Wooowee this pair is moving just like a roller coaster! Yesterday we saw the drop and today we saw the rally. What will this pair do next? 4hr stochastics say that we could still see a little more upside movement as they are still trending up and aren’t quite in overbought territory yet while daily stochastics are trending down which leads me to believe that the pair will head down in the medium term. Hmmm…what to do? Well yesterday the pair broke down out of its ascending triangle and today the pair moved right back up. Could this be an indication of the bulls gaining momentum? I think the critical resistance level is 118.50 as that is what is forming the upper bound of the ascending triangle. If you look at the daily chart, it now looks like a new ascending triangle is forming. The pair isn’t quite at 118.50 and I think we’ll see the pair dip back down before it rallies back up to that level. I’m thinking that I will buy the pair on the dip and set my sights around the 118.50 level.
Buy USD/JPY at 117.60; Stop Loss= 116.70; Target= 118.50