Recapping the Majors
EUR/USD– The Euro eased up slightly as it dropped from around 3850 to 3800. The pair had held resistance at 3800 for the past few days until it broke through two days ago. The pair seems to have cooled down and looks to have gone back to its resistance point at 3800.
Result: The Euro fell slightly and went back to its resistance level at 3800.
GBP/USD- The Cable slowed down its gains but still rallied slightly higher against the Dollar as it hovered around the 2.0600 level. The Sterling has just been on a tear and hasn’t slowed down too much. Will the 2.0600 level finally hold as a resistance level?
Result: The Sterling rallied slightly higher against the Dollar for the 2nd straight day as it neared the 2.0600 mark again.
USD/CHF- The Dollar finally made a strong rally against the Swissy as it shot up from the 2000 support level all the way to 2078. The pair had been treading along the 2000 support for the past several days and finally made a nice bounce up today.
Result: The Dollar finally surged up against the Swissy as it bounced off the 2000 support area after being stuck for the previous several days.
USD/JPY- The Dollar dropped for the 2nd straight day against the Yen as it fell down to 121.00 again but was unable to close below it. The Dollar has fallen almost 150 pips in the past 2 days and seems to have found some support at the 121.00 mark.
Result: The Dollar fell against the Yen for the 2nd straight day as it dropped to 121.00 again but was unable to close below it.
Chart Analysis: What’s going to happen next?
Although the Euro moved up past the 3800 resistance level, I still think its a good place to look to go short. Daily stochastics has been in overbought territory since June 25th and the pair seems to be at a high level right now. Look for the pair to drop down to around 3750 tomorrow.
The Sterling is still moving up but I really think the uptrend may be nearing its end. The pair has been rallying since early June and at the level it’s at now I think the market will eventually start to revert back to the mean. Both 4hr and daily stochastics are in overbought territory and I would watch for the Cable to drop from 2.0600 to around 2.0550.
The Swissy finally bounced off its 2000 support level like I had been saying it would and it looks like the pair will continue to move up. Daily stochastics are trending up nicely which confirms my bullish bias and I would look for the pair to continue to move up to 2100.
The Yen dropped pretty hard the past 2 days and has reached a support level at 121.00. Daily stochastics and 4hr stochastics are nearing oversold territory so I would expect the pair to drop slightly lower before moving back up. Look for the pair to break slightly below 121.00 before making another run back up.