While the forex world is tense before the monetary policy decisions are announced, it doesn't mean that the landscape is free from interesting moves. Quite to the contrary - the pre-FOMC positioning reveals a lot about the upcoming moves. This has led to not one, but two new trading decisions of ours.

In our opinion, the following forex trading positions are justified - summary:

• EUR/USD: none
• GBP/USD: none
• USD/JPY: short (a stop-loss order at 109.31; the initial downside target at 107.86)
• USD/CAD: none
• USD/CHF: short (a stop-loss order at 1.0021; the initial downside target at 0.9815)
• AUD/USD: none

EUR/USD

While EUR/USD extended its move to the upside, the sellers stopped further gains earlier today. It suggests that we'll see a retest of the green support zone in the very near future. If the support withstands the selling pressure, we'll consider opening long positions.

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.

USD/JPY

We wrote these words regarding the orange resistance zone in our Monday's commentary:

(...) Taking into account the buy signals generated by the daily indicators, one more upswing aiming to test the above mentioned resistance is probably still ahead of us.

The exchange rate has indeed retested the above-mentioned resistance - both yesterday and the day before. The 38.2% Fibonacci retracement has stopped the bulls however. A pullback followed, leading to another invalidation of the earlier intraday breakout above that retracement.

Combined with the current position of the daily indicators, lower values of the pair are probably just around the corner. Connecting the dots, opening short positions is justified from the risk/reward perspective. All details below.

Trading position (short-term; our opinion): Short positions with a stop-loss order at 109.31 and the initial downside target at 107.86 are justified from the risk/reward perspective.

USD/CHF

Similarly to what we saw in USD/JPY, the USD/CHF bulls didn't manage to break above the previous peak and the pink resistance zone. The pair didn't even make it to the 50% Fibonacci retracement.

The current position of the daily indicators and today's attempt to move below the 38.2% Fibonacci retracement suggest that further deterioration may be just around the corner.

Taking all the above into account, opening short positions is justified from the risk/reward point of view. All details below.

Trading position (short-term; our opinion): Short positions with a stop-loss order at 1.0021 and the initial downside target at 0.9815 are justified from the risk/reward perspective.

Summing up the Alert, the euro upswing has rolled over earlier today, suggesting another test of the orange support nearby. Should it hold, we'll consider opening long positions. The USD/JPY bulls had trouble overcoming orange resistance zone, revealing the bulls' weakness. The daily indicators are on the verge of issuing sell signals, and opening short positions is justified. Similarly in USD/CHF, the bulls appear exhausted and unable to overcome the pink resistance zone. The move lower is supported by the bearish positioning of the daily indicators, warranting opening a short position. Apart from these, there're no other opportunities worth acting upon in the currencies. As always, we'll keep you - our subscribers - informed.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist