Recapping the Majors
EUR/USD– Finally, after many days of abusing the Dollar, the Euro finally cooled off and fell pretty hard today. It was pretty much a one sided battle as the Euro fell consistently through the day which could be an indication of a continuing drop.
Result: The Dollar regains strength and pushed the Euro down almost a 100 pips today.
GBP/USD- The resistance at 9700 held strong and the Dollar was able to push the Sterling back down. However, the move wasn’t as dramatic as the Euro’s fall and the price has settled only slightly lower than its open price.
Result: The Dollar pushed the Sterling lower but was unable to keep the momentum and only pulled out a small victory.
USD/CHF- After a few days of staying quiet, this pair actually had some movement today. The Dollar rallied to as high as 2181 but met resistance at the 4hr, 100 SMA. The Swissy pushed the dollar back down slightly and the pair is now trading just under 2150 at around 2140. Although it was a victory for the Dollar the pair still looks range bound and there is still no established direction.
Result: The Dollar rallied against the Swissy but met resistance and ended up with only a small victory.
USD/JPY- The Dollar also rallied higher against the Yen and breached the 118.00 level. The pair has been consolidating so today’s move could be an indication of a Dollar rally.
Result: Today’s Dollar victory could be the beginning of a breakout to the upside since this pair has been consolidating for the past few days.
Chart Analysis: What’s going to happen next?
Ahhh the Euro finally fell after showing signs of its exhausted rally for days. It fell more than I thought it would and dropped to almost 3300. 4hr stochastics are trending down and haven’t reached oversold territory yet which means that we could still see some drops into tomorrow. Add to that the fact that daily stochastics are still in overbought territory and we have the makings of a pretty good fall. Currently the Euro is at 3328 and I would expect to at least fall to 3300 and maybe even its 50 EMA on the 4hr chart which is right around 3285. If its really volatile, then watch for the pair to drop to 3250.
The 9700 held pretty strong today as the Cable proceeded to bounce down from that area. 4hr stochastics are trending down and daily stochastics are in overbought territory which indicates that this pair is ready to drop. Currently the pair is trading at around 9643 and I think we could see the pair fall to around 9500. It might not all happen tomorrow but I think that is the next area for this pair to go. 9500 seems like a suitable target because that is where the 50 EMA and 200 SMA are on the 4hr chart. I’m still going to hold off on trading this pair because I’m not sure if I see enough bearish momentum to dive in. I will keep my eye on it though and keep my radar up if I see anything.
Although the Dollar rallied higher against the Swissy it still doesn’t look like there is a clear directional bias. The pair met resistance at its 100 SMA on the 4hr chart and is currently trading right under its 50 EMA. Both 4hr and daily stochastics are trending up which would indicate the the price will also go up but daily stochastics never reached oversold territory. At this point I think anything is still possible. Although the stochastics are indicating a rally, the pair faces resistance at its 50 EMA and 100 SMA on the 4hr chart. Now if the pair can break 2200 (which would also effectively break the 50 EMA and 100 SMA) then I think there is a good chance we’ll see the Swissy move to its 38% Fib line on the daily chart. Again, I’m not comfortable entering this pair yet but I do have my radar up.
Yesterday I talked about how there was a symmetrical triangle forming on the daily chart of this pair. This is usually a good indication that the pair will break out. Today the pair did just that and even pierced through 118.00. It didn’t quite reach 118.50 like I projected but I think the pair still has a good chance of making it there. Both 4hr and daily stochastics are trending up and are not in overbought territory yet so I think that 118.50 is still a very good possibility.
I know I haven’t posted a trade in a while but I really haven’t seen anything too convincing for me to put my money in the markets. If you’re getting ansy then thats understandable but remember that we are already up quite a few pips so while we’re not making any more pips at the moment, we are also not losing any 🙂