After trying to break down its support, the euro rebounded, and still trades above its recent consolidation. Can the bulls think about higher values shortly? What about the other pairs? The British pound springs to mind - can the buyers go higher still? Let's address these and other question marks you may have.
In our opinion, the following forex trading positions are justified - summary:
EUR/USD
On Friday, EUR/USD invalidated the tiny intraday breakdown below its recent consolidation and the horizontal green support line. Sharp upswing followed, and the 50% Fibonacci retracement has been reached.
Earlier today, the bulls attempted to go higher, yet the rate pulled back shortly. It is currently trading at around 1.1120, which marks the upper border of the blue consolidation.
Such a price action looks like a verification of the earlier breakout and could translate into a rebound in the very near future. This is especially the case when we factor in the bullish position of the daily indicators.
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.
GBP/USD
GBP/USD broke out above the upper border of the blue consolidation and also above the orange resistance zone. On Friday, the pair has reached the upper border of the declining grey trend channel.
Earlier today, the exchange rate headed lower once again. The bulls' weakness can translate into a verification of earlier breakouts above both resistances, or (should the daily indicators generate their sell signals) even into a retest of the green support zone.
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
Despite the bulls' best efforts, USD/CAD closed on Friday below the lower border of the rising green trend channel. While the bulls have been trying earlier today to invalidate the breakdown, they haven't been successful though.
For now, the pair is still trading inside both the blue consolidation and the black triangle. Currently, it's right at the 50% Fibonacci retracement. A bigger move to the downside will be more likely and reliable should we see a drop below these supports.
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, despite today's downswing, EUR/USD has broken above its recent consolidation. It looks to be testing the breakout, and the bullish position of the daily indicators confirms that. There have been no signs of the USD/JPY and USD/CHF bulls' strength and a break above their respective resistances that would justify possible long positions. 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
