Euro bulls' weakness took some time to manifest, but it's clearly here. Indeed, there had been more to the story - just like we've told you yesterday. Some meaningful movements are afoot in the currency arena right now. Is that enough for us to take a new trading action? The answer is a resounding yes. But you didn't expect us to tell you where exactly right away, did you?

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: short (a stop-loss order at 0.7272; the initial downside target at 0.7065)

EUR/USD

We have written these words yesterday:

(...) The recent peaks in combination with the nearest resistances (the 50% Fibonacci retracement and the upper border of the blue declining trend channel) stopped the buyers for the fourth trading day in a row.

As a result, the pair pulled back, invalidating today's tiny intraday breakout.

The sell signals of the daily indicators remain on the cards, which suggests that lower values of the exchange rate are still ahead of us.

The situation has developed as we have expected. Earlier today, EUR/USD had moved sharply lower, making our short positions profitable. It broke not only below yesterday's lows, but also below the lower border of the very short-term green rising trend channel.

This is a bearish development. Combined with the sell signals generated by the daily indicators, it increases the likelihood of lower values of the exchange rate in the coming days. If this is the case, a test of the red support line (the lower border of the long-term red declining trend channel) would follow.

Trading position (short-term; our opinion): Profitable 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. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.

USD/CHF

On Tuesday, we have said that the next target for the bulls would be the upper border of the brown rising trend channel. Looking at the daily chart, we see that the buyers not only reached this line, but broke through and approached the yellow resistance zone created by the previous peaks.

All the daily indicators are in their overbought positions. As long as there are no sell signals generated, another move to the upside and a test of the early-March or even mid-November highs is likely, however.

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

Let's start with the weekly chart. We see that the breakout above the blue dashed resistance line (based on the previous peaks) is being invalidated as the trading week is drawing to a close.

How did this price action affect the daily chart?

In our Tuesday's Alert, we have mentioned the bulls' problems overcoming the yellow resistance area. As you can see, it has stopped the buyers yesterday and also earlier today. That triggered a move to the downside.

Additionally, the CCI and the Stochastic Oscillator are on sell signals. These increase the probability of further deterioration in the coming days.

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

Trading position (short-term; our opinion): Short positions with a stop-loss order at 0.7272 and the initial downside target at 0.7065 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 euro bulls' weakness is on full display now and the profitable short position is justified. Also the weakness of AUD/USD bulls has just made us open a short position, Apart from these, there're no other opportunities worth acting upon in the currencies right now. As always, we'll keep you - our subscribers - informed.

On an administrative note, due to the Easter holidays and the travel schedule involved, we will not provide regular Alerts tomorrow (Friday; the US markets are closed anyway, so the trading is likely to be limited) and on Monday. The Alerts will be published normally, starting on Tuesday, April 23rd. Naturally, if anything urgent happens, we will keep you updated through quick intraday Alerts.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist