While the euro made a powerful move down yesterday, the bears didn't have much success taking the pair lower on a lasting basis. Is this just a breather ahead of tomorrow's ECB, or can we expect some sort of recovery soon? What about the other currency pairs, what are the likelihoods of their upcoming moves?
In our opinion, the following forex trading positions are justified - summary:
- EUR/USD: none
- GBP/USD: none
- USD/JPY: none
- USD/CAD: none
- USD/CHF: none
- AUD/USD: short (a stop-loss order at 0.7113; the downside target at 0.6935)
EUR/USD
Yesterday, EUR/USD broke below major short-term supports, opening the way to the south. While the move lower continues earlier today, the pair is practically at the next support area (it has tested the upper border of the green support zone).
As long as this support holds, another bigger move to the downside is not likely to be seen and reversal in the very near future should not surprise us.
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/CAD
USD/CAD broke above the upper border of the yellow consolidation, triggering further improvement. The pair went on to climb to the red resistance area created by its previous peaks.
The daily indicators are still on their buy signals, suggesting that we can see a test of the 38.2% Fibonacci retracement (that's slightly above yesterday's high) before the sellers step in.
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/CHF
Overall, the situation hasn't changed much as USD/CHF is still trading inside the declining orange trend channel. Therefore, as long as there is no successful breakout above the upper border of the formation or a breakdown below its lower border, a bigger move in either direction is not likely to be seen.
Nevertheless, the current position of the daily indicators suggests that the bulls may try their luck in the very near future. Should we see more signs of the bulls' strength, we'll consider opening long positions. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.
Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective.
Summing up the Alert, EUR/USD has moved sharply lower yesterday, and went on to test an important support that has held earlier today. Opening short positions is not advisable from the risk-reward perspective at this moment. AUD/USD downswing goes on, and the daily indicators keep supporting the move lower. Therefore, the short position is justified. In USD/CHF, we'll keep monitoring the bulls for signs of strength - that will show us whether opening long positions becomes justified or not. 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
