Recapping the Majors
EUR/USD– After 2 days of losses, the Euro stepped up its game and rallied nicely against the Greenback, gaining about 60 pips as the pair moved from 3600 to around 3663. The pair started the day off at around 3608 and dropped down to as low as 3562 where it found support at its 100 SMA on the daily chart. The Euro bulls then took over and pushed the pair up about 100 pips from there and the Euro finally settled at around 3663.
Result: After 2 days of losses, the Euro opened a can of "whoop-@ss" on the Dollar as it gained 60 pips from 3600 to around 3663.
GBP/USD- Like its Euro brethren, the Cable also ripped open a new one on the Dollar as it rallied over 100 pips today, moving from 2.0035 to around 2.0163. The pair opened up at 2.0034 and dropped about 70 pips to 1.9957 before the Sterling gained its ground and rallied for 200 pips, bringing the pair to around 2.0163.
Result: The Sterling rose up against the Dollar after 2 days of humiliating losses and gained about 100 pips, moving from 2.0035 to around 2.0163.
USD/CHF- For the 3rd straight day, the Swissy stayed pretty quiet. The pair opened the day up just above 2000 where it made a sorry excuse for a rally to 2038 before moving below the 2000 mark where it is currently trading around 1992. Talk about boring!
Result: The Swissy stayed pretty still as it once again hovered around the 2000 area.
USD/JPY- The Dollar waved its finger at the Yen today and said "Oh no you didn’t" as it got revenge for its sorry defeat yesterday, rallying about 100 pips from 114.50 to around 115.50. The pair opened up at around 114.37 and dropped down to 114.00, but thats where the Yen’s victory party was cut short. From there the Dollar fought back and brought the Yen to around 115.50 and had the last laugh of the day. Mwuahaha!
Result: The Dollar rallied about 100 pips against the Yen today as it moved from around 114.50 to around 115.50.
Chart Analysis: What’s going to happen next?
Now that we’ve seen the Euro rise today, I think we’ll start to see the pair fall once again. First of all the pair is hitting resistance at its 200 SMA on the 4hr chart. Second of all, there is a bearish hidden divergence on the daily chart, and third of all, daily stochastics are trending down. Those sound like pretty darn good reasons to start looking to go short on this pair. The only bullish indication is that 4hr stochastics are trending up, but they will be hitting overbought territory soon. Look for the pair to stay around 3670 or even float to around 3700, but after that, be on the lookout for the Euro to drop to around 3570 (100 SMA on the daily chart).
Like the Euro, I think the glory days of the Sterling will be cut off in the near future. While we don’t have any divergences, 4hr and daily stochastics are now heading into overbought territory which means that we should see the pair start to fall soon. Now the stochastics lines haven’t crossed down yet so the pair may rise a little more (say to around 2.0200), but I would look for the Cable to fall to around 2.0100 sometime soon.
I’m sticking to my guns on this pair and am waiting for a breakout to the upside. The pair has been quiet for 3 days now and daily stochastics have crossed up in oversold territory. Look for the pair to bounce off of 2000 and move up to its 50 EMA on the daily chart at around 2082.
Well the Yen did find support at 114.00 like I said yesterday and boy did it ever! The pair rallied pretty strong, and now the pair seems to have found slight resistance at its 50 EMA on the 4hr chart. If the pair can break the 50 EMA and move up to around 115.70, I would watch for the pair to continue on up to 116.00.