The Fed day is here again. Mario Draghi also speaks today. And the currencies keep moving in line with market participants' expectations as they attempt to front-run the monetary policy announcements. In a tight and highly contested day such as this one, a careful chart analysis of the bigger picture and the context of recent moves wins the day. So, let's dive right into it.

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

• EUR/USD: short (a stop-loss order at 1.1286; the downside target at 1.1166)
• GBP/USD: short (a stop-loss order at 1.2643; the downside target at 1.2488)
• USD/JPY: none
• USD/CAD: none
• USD/CHF: none
• AUD/USD: none

EUR/USD

Yesterday's session brought EUR/USD lower and earlier today, the pair has made a modest move higher. We shouldn't read too much into it however, as the daily indicators' sell signals remain on the cards and suggest further deterioration ahead.

If it's indeed the case, we're likely to see at least a test of the upper border of the previously-broken declining blue trend channel in the very near future.

Trading position (short-term; our opinion): 50% of existing profitable short positions with a stop-loss order at 1.1286 and the downside target at 1.1166 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

GBP/USD's break below the late-May lows brought further deterioration yesterday. Before the closing bell however, the bulls pushed the rate higher, invalidating its earlier breakdown below the Monday's low.

Today's trading brought further price recovery which suggests that before another move lower, even a test of the previously-broken orange support-turned-resistance zone isn't out of the question.

Should we see such a reversal lower, where would the bears take aim?

Their first downside target would be at around 1.2476. That's where the upper border of the green support zone is.

Trading position (short-term; our opinion): Profitable short positions with a stop-loss order at 1.2643 and the downside target at 1.2488 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/JPY

The USD/JPY situation hasn't changed much in recent days. The pair is still trading in a narrow consolidation inside the declining blue trend channel.

The buy signals of the daily indicators continue to support the buyers. This could translate into one more upswing targeting the upper border of the declining blue trend channel before another move to the downside.

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, today's EUR/USD upswing notwithstanding, lower values of the pair remain probable. GBP/USD has eventually turned higher yesterday, suggesting a possible retest of the late-May lows prior to any continuation lower. Both profitable short positions remain justified. As USD/CHF bulls haven't broken above the nearest resistances, opening long positions isn't warranted. 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