Earlier today, the Australian dollar climbed against the greenback to its highest level since the beginning of the month, which took AUD/USD to the key resistance zone. Will it withstand the buying pressure in the coming week?

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

• EUR/USD: long (a stop-loss order at 1.1114; initial upside target at 1.1327)
• GBP/USD: none
• USD/JPY: none
• USD/CAD: short (a stop-loss order at 1.3346; initial downside target at 1.2876)
• USD/CHF: none
• AUD/USD: none

EUR/USD

Looking at the daily chart, we see that EUR/USD moved little higher earlier today and is currently trading around yesterday’s peak, which suggests that our Tuesday’s assumptions remain up-to-date:

(…) the CCI and Stochastic Oscillator generated sell signals, suggesting further deterioration in the coming days. Nevertheless, when we take a closer look at the daily chart we can notice a potential reverse head and shoulders formation. If this is the case, the right shoulder is currently underway and we should see a reversal in the coming day(s). Nevertheless, if the exchange rate drops under 1.1174 we’ll likely close long positions. As always, we’ll keep you - our subscribers - informed should anything change.

Very short-term outlook: bullish
Short-term outlook: mixed with bullish bias
MT outlook: mixed
LT outlook: mixed

Trading position (short-term; our opinion): Long positions (with a stop-loss order at 1.1114 and initial upside target at 1.1327) 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

Quoting our Tuesday’s alert:

(…) GBP/USD slipped to the green support line based on the previous lows (marked on the daily chart) and the lower border of the red declining trend channel. Additionally, daily CCI and Stochastic Oscillator generated buy signals, which could encourage currency bulls to act in the coming days.

From today’s point of view, we see that currency bulls pushed the pair little higher as we had expected. With this increase GBP/USD reached the orange resistance line, which could pause further improvement – similarly to what we saw a week ago. Therefore, in our opinion, as long as there won’t be invalidation of the breakdown under this resistance line another bigger move to the upside is not likely to be seen. Nevertheless, we should keep in mind that buy signals generated by the indicators remain in play, supporting another attempt to move higher.

Very short-term outlook: mixed with bullish bias
Short-term outlook: mixed
MT outlook: mixed
LT outlook: bearish

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

Looking at the above charts, we see that although AUD/USD moved little higher earlier today, the medium-term green rising line and the long-term declining orange resistance line (both marked on the weekly chart) in combination with the orange resistance zone (seen on the daily chart) coninue to keep gains in check. Therefore, what we wrote on Tuesday is up-to-date also today:

(…) Additionally, the CCI and Stochastic Oscillator generated sell signals, which suggests that another attempt to move lower is just around the corner. Therefore, in our opinion, if the exchange rate closes one of the following days under the purple support line, we’ll consider opening short positions. As always, we’ll keep you - our subscribers - informed should anything change.

Very short-term outlook: mixed with bearish bias
Short-term outlook: mixed with bearish bias
MT outlook: mixed
LT outlook: mixed

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.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager

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