Is the calmness in the currencies arena perplexing? It needn't be. The key is to look at the bigger picture, to analyze the context of the charts. It serves to refine the odds, to sort the wheat from the chaff. And we are on such a juncture right now. In the hunt for new opportunities, let's examine how the odds are titling in our favor ever more.

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

• EUR/USD: Short (a stop-loss order at 1.1398; the initial downside target at 1.1221)
• GBP/USD: Short (a stop-loss order at 1.2824; the initial downside target at 1.2602)
• USD/JPY: none
• USD/CAD: none
• USD/CHF: none
• AUD/USD: Short (a stop-loss order at 0.7041; the initial downside target at 0.6910)

EUR/USD

While EUR/USD has moved higher yesterday, the proximity to the upper border of the blue consolidation encouraged the sellers to act. The pair has been unable to overcome last week's highs and pulled back.

Combing such hesitation in moving higher with the current positioning of the daily indicators, increases the probability of a larger upcoming move to the downside. Therefore, the short position remains justified from the risk/reward perspective.

Trading position (short-term; our opinion): Short positions with a stop-loss order at 1.1398 and the initial downside target at 1.1221 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 has been moving sharply lower in the previous week, without much in terms of a break. It has dropped not only to a fresh June low, but also below the lower orange support zone, the lower border of the rising purple trend channel and the medium-term rising green support line based on the February lows. After breaking below the lower orange support, it now serves as resistance on any move higher.

Monday's drop took the pair intraday even below the 61.8% Fibonacci retracement, but the bulls managed to trigger a rebound. The rate has modestly continued to climb higher since.

As for the daily indicators, both the CCI and the Stochastic Oscillator are very close to generating their respective buy signals. The question is whether we can trust them. In our opinion, not yet. As long as the exchange rate remains below the above-mentioned resistances, the way to the north is faces stiff resistance and reversal from this area should not surprise us in the least.

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

Yesterday's tiny upswing in AUD/USD looks to be over and earlier today, the rate has hit a fresh weekly low. This means our short position has become even more profitable.

The daily indicators remain on their sell signals, hinting that further deterioration remains probable. Connecting the dots, a test of our initial downside target in the following days is very likely.

Trading position (short-term; our opinion): Short positions with a stop-loss order at 0.7041 and the initial downside target at 0.6910are 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 bearish outlook for our three open positions (EUR/USD, GBP/USD and AUD/USD) looks to be intact. GBP/USD needs arguably the most time to roll over while EUR/USD looks to be hanging on by its fingernails. AUD/USD is a different cup of tea - it's heading south without much in terms of looking back. The momentum demonstrated and the difficulty in overcoming nearest resistances, bode well for seeing lower values ahead - in each of the above pairs. 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