Earlier today, official data showed a significant drop in U.K. claimant count, which pushed GBP/USD higher. But did this increase change anything in the overall picture of the exchange rate?
In our opinion the following forex trading positions are justified - summary:
- EUR/USD: none
- GBP/USD: short (a stop-loss at 1.3579; initial downside target at 1.2519)
- USD/JPY: none
- USD/CAD: short (stop-loss at 1.3274; initial downside target at 1. 2740)
- USD/CHF: short (stop-loss at 0.9895; next downside target at 0.9600)
- AUD/USD: none
Due to technical problems, todayís Forex Trading Alert doesnít contain any charts.
EUR/USD
What happened with the euro against the greenback since our previous commentary was posted? The overall situation in EUR/USD has deteriorated slightly as the exchange rate invalidated yesterdayís breakout above the medium-term brown resistance line. However, despite this event, the pair is still trading above the previously-broken upper border of the red declining trend channel and Aug highs, which suggests that as long as there wonít be decline below these levels another attempt to test the brown resistance line canít be ruled out.
Very short-term outlook: mixed
Short-term outlook: mixed
MT outlook: mixed
LT outlook: mixed
GBP/USD
What happened at the same time with GBP/USD? Although the pair rebounded yesterday, currency bulls didnít manage to push the exchange rate above the previously-broken lower border of the blue consolidation, which resulted in a pullback earlier today. Taking this fact into account, we believe that lower values of GBP/USD are still ahead us. If this is the case, and the pair extends declines, weíll see (at least) a test of the Jul lows in the coming days.
Very short-term outlook: bearish
Short-term outlook: bearish
MT outlook: bearish
LT outlook: bearish
USD/JPY
Finishing todayís alert, weíll focus on USD/JPY. From todayís point of view we can say that although the pair dropped under the lower border of the blue consolidation, the early Jul low in combination with the 88.6% Fibonacci retracement encouraged currency bulls to act, which resulted in a rebound earlier today. Despite this increase (at the moment of writing these words), the exchange rate is still trading under the lower line of the consolidation, which suggests a re-test of the support area created by the Jul low and the Fibonacci retracement in the coming day(s).
Very short-term outlook: mixed
Short-term outlook: mixed
MT outlook: mixed
LT outlook: mixed
Thank you.
Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager
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