The euro decline has lost pace it seems. Is it a harbinger of a reversal higher, or more downside will follow? The currencies haven't moved much earlier today with the exception of the British pound. Yet, they're dealing us continued profits as the Australian dollar just keeps going lower, leading us to adjust our open trade parameters. It's also time to examine the setups that are shaping up elsewhere in the forex realm.
In our opinion, the following forex trading positions are justified - summary:
- EUR/USD: none
- GBP/USD: none
- USD/JPY: none
- USD/CAD: none
- USD/CHF: none
- AUD/USD: short (a fresh stop-loss order at 0.6962; the exit downside target at 0.6885)
EUR/USD
The ECB-induced upswing in EUR/USD has evaporated, and the pair is again close to its previous lows and at the upper border of the green consolidation. The bulls have been able to defend this level on Friday, and the same looks to be the case also today as the pair trades at around 1.1130.
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
USD/JPY invalidated the breakdown below the green support line, triggering a move to the upside. The upswing eventually took the exchange rate to the orange resistance zone.
Earlier today, the pair has pulled back a bit. Taking into account the buy signals generated by the daily indicators, one more upswing aiming to test the above mentioned resistance is probably still ahead of us.
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/CHF
USD/CHF broke above the the upper border of the orange declining trend channel and didn't look back since. The upswing took it to the pink resistance zone.
Earlier today, the pair pulled back but similarly to USD/JPY, the daily indicators' buy signals remain in play, suggesting high likelihood of one more upswing coupled with a retest of the pink area or even a test of the 50% Fibonacci retracement.
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
On Friday, AUD/USD moved sharply lower. As it broke below our next downside target, it has made our short positions even more profitable. The sell signals of the daily indicators remain on the cards, suggesting that we could see a test of the green support zone in the very near future.
Taking all the above into account, we are updating our target and the stop-loss level. All details below.
Trading position (short-term; our opinion): Profitable short positions with a fresh stop-loss order at 0.6962 (well below our entry level to protect our gains) and the exit downside target at 0.6885 are justified from the risk/reward perspective.
Summing up the Alert, The ECB-induced upswing in EUR/USD is gone, and the pair wanders aimlessly at the upper border of the green consolidation. The bulls have been able to defend this level on Friday, and the same looks to be the case also today - yet the price action doesn't attest to any signs of the their strength. No position is therefore justified from the risk-reward perspective. AUD/USD downswing continues unabated, making our short positions even more profitable. The daily indicators keep supporting the move lower, 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
