The dollar got no love on this Valentines day as the other major currencies gave it a thorough slap in the face. Let’s see if the charts give us any good trading opportunities today…
Yesterday I mentioned that the Euro rally was probably for real this time after seeing the price bounce down to 2900 after hitting the 3040 area two times before. This last time, the price did not make it to 2900 and in contrast, made a nice rally back up to 3030 yesterday. This led me to believe that the Euro bulls were for real this time and today the price sky rocketed to as high as 3150! 4hr stochastics are in overbought territory and daily stochastics are just now entering overbought territory. We’re also seeing a bearish divergence on the 4hr chart. I think the Euro will fall back down to 3100 but after that the pair could rally some more since it just broke through a month long resistance area.
After falling for 5 days straight, the Pound has finally rallied back against the dollar. I’ve drawn new Fibonacci lines since it looks like we’ve seen a new swing high and low. Notice that the Cable rally has pushed the price slightly above its 38% Fib line. Daily stochastics are trending up and have a lot of room before getting into overbought territory so there’s a good chance the pair will move to its 61% Fib line. The only thing is that the 4hr stochastics are in overbought territory so we could see a slight retracement first.
The Swissy dropped nicely for the 2nd straight day and is now facing some tough support. It briefly pierced through its 50 EMA and 100 SMA but bounced back up and is now hanging around just under 2400. If the pair breaks through its 200 SMA look for the Swissy to make a strong run towards 2300. If not, it will just be another range bound bounce back up to 2450-2500.
Like the Swissy, the Yen made a nice drop once again. Now the pair is facing support at its 200 SMA on the 4hr chart. 4hr stochastics are, and have been in oversold territory so a retracement to the upside is a good possibility. However, daily stochastics are trending down nicely and have plenty of room before reaching oversold territory. I think we’ll see a bounce back up to around 121.00 followed by another drop to 120.50 or even 120.00.