The euro bulls haven't disappointed today. They fought hard for higher prices. But how does the following decline fit into the picture? It must have been a part of the usual daily fluctuations as the rate is close to unchanged now. In other words, nothing has changed. Is this a case of a glass half empty or half full? We have a surprising answer for you. Wait. Something more. Action to take.

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

• EUR/USD: short (a stop-loss order at 1.1362; the initial downside target at 1.1215)
• GBP/USD: none
• USD/JPY: none
• USD/CAD: none
• USD/CHF: none
• AUD/USD: none

EUR/USD

EUR/USD attempted to move higher earlier today, but the bulls gave up all their gains and then some. The powerful combination of nearby resistances (detailed here) was just too strong for them.

This show of weakness triggered a pullback. Better call that almost a reversal as the bears managed to push the pair down. It increases the likelihood of further deterioration in the coming days. Just look at the sell signals generated by the CCI and the Stochastic Oscillator.

Taking all the above into account, we think that opening short positions is justified from the risk/reward perspective.

Trading position (short-term; our opinion): Short positions with a stop-loss order at 1.1362 and the initial downside target at 1.1215 are justified from the risk/reward perspective.

USD/CHF

USD/CHF looks to be going from strength to strength. Yesterday, it bounced off the lower border of the very short-term brown rising trend channel and finished the day on a strong note. Earlier today, the bullish momentum continues.

If the bulls keep on, we'll likely see a test of the upper border of the brown rising trend channel in the very near future.

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

The AUD/USD situation might seem bullish on the surface. After all, AUD/USD broke above the upper border of the blue consolidation in the previous week and is still trading above it. On the other hand, the pair is still trading below the 61.8% Fibonacci retracement and the yellow resistance zone.

Additionally, the CCI generated its sell signal, while the Stochastic Oscillator is very close to doing the same. This suggests that even if we see one more upswing (or even a test of the upper border of the yellow zone created by the February peak and the 70.7% Fibonacci retracement), a reversal in the near future is very likely.

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, the signs of the euro reversal and bulls' weakness have made us act today and a short position is justified. There're no other opportunities worth acting upon across the currencies right now. As always, we'll keep you - our subscribers - informed.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist