Recapping the Majors
EUR/USD– The Euro started the day quiet but ended up falling to the Dollar in the late trading hours as it headed back down towards 3300. The pair still didn’t make any significant moves as it is still stuck between the 3300-3400 range but this does make you wonder if the resistance at 3400 may have been too strong for the Euro to surpass.
Result: The Euro fell slightly to the Dollar today but is still stuck in a range between 3300-3400.
GBP/USD– The Sterling started the day strong and briefly pushed itself past the 9800 resistance level. However, the Dollar took control later in the day and pushed the Sterling back down below 9750. The 9800-9900 area is tough resistance for the Sterling and today’s movement confirms its strength.
Result: The Sterling was unable to breach 9800 with much momentum and as a result, the Dollar pushed the Sterling back down below 9750.
USD/CHF– After staying rangebound between 2100-2200 for the past 10 days, the pair was finally able to break the pattern as the Dollar rallied past 2200 and actually closed above it at 2222. There was very little resistance as the Dollar had full control over the entire day.
Result: The Dollar finally rallied above 2200 and was able to hold its ground above that level. Could this be the start of a Dollar rally versus the Swissy?
USD/JPY– The Dollar really rallied nicely against the Yen today. 118.50 had been a pretty good resistance level but the Dollar was able to surge past it and rallied to as high as 118.96 and closed right around there as well. The pair had been forming an ascending triangle since March 4 and today’s breakout could be a turning point for the pair. Could the Dollar gain more momentum against the Yen now?
Result: The Dollar broke through resistance at 118.50 and rallied hard against the Yen, surging to just under 119.00
Chart Analysis: What’s going to happen next?
Ok so the Euro didn’t have enough juice to make it back to 3400 and it once again fell down towards 3300. Notice I said "towards" 3300 which means that it didn’t actually break it. The Euro is range trading between the 3300-3400 level which to me, still indicates that the market is undecided as to which way the pair should go. 4hr and daily stochastics are trending down which confirms a bearish sentiment but I think we’ll have to see a good break of 3300 in order to start looking for short trades. Hold off for now if you can because I think this pair is just "floating" around.
Yesterday I said that the Cable would go to 9800 or pierce above it before falling back down and thats just what it did today. I believe it would take an extreme fundamental catalyst for the Sterling to rally higher than 9900 so the the 9800-9900 area should be considered as major resistance. 4hr and daily stochastics are trending down which confirms my bearish sentiment and today’s price action indicates that we could see the Sterling lose more ground over the next couple of days. The pair is currently at 9736 and I would expect it to hit 9700 sometime today and we may even see it hit its 50 EMA on the 4hr chart which is currently at 9665.
Well I said yesterday that if the Swissy followed its same pattern, then we would see it head back down to 2100. The Swissy did NOT follow its pattern and the pair surged higher past 2200 and actually closed above that level. While that makes me slightly more bullish, the pair is currently facing resistance at its 38% Fib line and its 50 EMA on the daily chart. 4hr stochastics are in overbought territory which also hinders my thoughts of being completely bullish just yet. Daily stochastics are still trending up and aren’t in overbought territory yet but it does lead me to believe that we could see slightly more upside movement but I’m not expecting much at this point. I think we could see the pair go to 2250 in the next day or so but I’m not extremely confident about having a total bullish sentiment.
Oh yea!!! My trade idea made a nice +90 pip profit as the Dollar rallied way past 118.50 and almost hit 119.00. The pair has now broken out of its ascending triangle that it had been forming since March 4 which is extremely bullish for the Dollar…..BUT……both stochastics are now in overbought territory. There are two possible scenarios. The first is that the pair continues to trend up and we see the stochastics just stay in overbought territory for an extended period. Or we see the pair bounce down from 119.00. At this point I’m not exactly sure what’s going to happen. I would expect to see at least a little retracement back down since we saw such a bullish move today so watch for the pair to float back down to 118.50. From there, it could go either way.