The USD upswing continues, and other currencies are feeling the pinch. The euro broke below its recent lows, so did the British pound, and the Australian dollar doesn't seem it wants to rise either. Where does it leave our open position and the pairs on our watch exactly?
In our opinion, the following forex trading positions are justified - summary:
- EUR/USD: none
- GBP/USD: none
- USD/JPY: none
- USD/CAD: short (a stop-loss order at 1.3353; the initial downside target at 1.3144)
- USD/CHF: none
- AUD/USD: none
EUR/USD
On Friday, EUR/USD has broken below the early-August low, and continued trading below it since. As the daily indicators haven't issued any buy signals, a test of the lower border of the declining yellow trend channel can be expected 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.
USD/JPY
Overall, there's little change in the USD/JPY outlook. The pair is still trading in a narrow range, consolidating slightly below the upper border of the declining red trend channel.
The bulls have trouble breaking above the upper border of the trend channel. Then, the Stochastic Oscillator is in an extended position, vulnerable to a decline. That would highlight the increasing probability of a downside price move 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
AUD/USD has dropped below several supports recently. The horizontal green support line, the late-August low and the lower border of the declining grey trend channel didn't withstand the selling pressure.
Current price action can be seen as a double bottom formation in the making. Should it be the case, then the rate would go on to invalidate the breakdown below the lower border of the grey trend channel, having to move above the lower border of the previously-broken declining red trend channel and also the August peaks.
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, EUR/USD broke below the August lows, and looks it's about to test the lower border of its new trend channel. USD/CAD bulls keep verifying the pair's earlier breakdown below the lower border of the black triangle, and the short position remains justified. 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
