Heading into the weekend, the currencies keep on moving. The euro decline goes on, and both currency pairs that we comment on today, are in a consolidation. Yet that doesn't invalidate their outlook in the least. Which currency pairs and what outlook?

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

• EUR/USD: none
• GBP/USD: none
• USD/JPY: none
• USD/CAD: none (in other words, we decided to close our long positions and take profits off the table)
• USD/CHF: none
• AUD/USD: none

EUR/USD

EUR/USD downswing continued yesterday with the pair breaking below the green support zone. The sell signals of the daily indicators remain on the cards, suggesting we'll likely see further deterioration and a test of the early-August low, or even the psychologically important barrier of 1.1000 in the following days.

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.

GBP/USD

From today's point of view, we see that the overall situation in GBP/USD hasn't changed much as the exchange rate is still trading inside the blue consolidation. Therefore, our Tuesday's commentary is up-to-date also today:

(...) But what's next?

Yesterday we have seen the invalidation of the tiny breakdown below the lower border of the grey declining trend channel and the green support zone. Additionally, there's a bullish divergence between the CCI and the exchange rate, and the CCI has generated its buy signal. Taking all these into account, an upside reversal may be just around the corner.

The bulls' chances would increase only if we see a successful breakout above last week's peaks. Should we see such price action, we'll consider opening long positions.

The Stochastic Oscillator has also generated its buy signal, increasing the probability of further improvement in the coming week.

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.

AUD/USD

Just as GBP/USD is trading inside a consolidation, AUD/USD is also confined to the blue consolidation between the lower border of the declining grey trend channel and the previously-broken lower border of the declining red trend channel. This lower border serves as the nearest resistance at the moment.

Let's recall our Wednesday's commentary - it's up-to-date also today:

(...) the pair is still trading inside the declining grey trend channel and above the early-2019 low. The daily indicators have also just flashed their buy signals, hinting at a possible reversal around the corner.

But as long as there's no breakout above the lower border of the declining red trend channel, a bigger move to the upside is questionable. Therefore, opening long positions isn't justified from the risk/reward perspective.

What could happen if the bulls fail in the above-mentioned support area? Then, further deterioration and even a test of the green support zone seen (created by the late 2008 and early 2009 lows) would lie ahead.

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.

Summing up the Alert, the euro has broken lower from its recent consolidation, and the bulls keep counting their losses. After yesterday's indecision, USD/CAD is heading lower today - and we're taking all open profits off the table. 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