Earlier today, official data showed that the German Manufacturing PMI increased more than analysts’ forecasts, which pushed EUR/USD higher. But did this move change anything in the overall situation in the short term?

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

• EUR/USD: none
• GBP/USD: short (a stop-loss order at 1.3272; the initial downside target at 1.2375)
• USD/JPY: none
• USD/CAD: none
• USD/CHF: none
• AUD/USD: none

EUR/USD

On the daily chart, we see that EUR/USD moved a bit higher earlier today, but despite this move the pair remains in a narrow range under the previously-broken upper border of the brown rising trend channel.

Additionally, the exchange rate is still trading around 38.2% Fibonacci retracement and the 112.8% Fibonacci extension marked on the weekly chart below. Nevertheless, the pair closed the previous week above the retracement and invalidated the earlier tiny breakdown under this support. Earlier this month, we saw a similar situation, which suggests that one more upswing and a re-test of the recent highs can’t be ruled out in the coming days.

Very short-term outlook: mixed
Short-term outlook: mixed
MT outlook: mixed
LT outlook: mixed

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

Quoting our last commentary on this currency pair:

(…) the yellow resistance zone stopped currency bulls once again and triggered a sharp decline in recent days. As a result, USD/JPY came back below the medium-term green support line based on the previous lows, which suggests a test of the Aug low, the previously-broken upper border of the brown declining trend channel or even the mid-April low of 108.11 in the coming week.

From today’s point of view, we see that the situation developed in line with the above scenario and USD/JPY slipped to the upper border of the brown declining trend channel. As you see, this support triggered a rebound, which took the pair to the previously-broken medium-term green support line. Despite this move, currency bears pushed the exchange rate lower earlier today, which suggests that the recent upswing could be nothing more than a verification of the earlier breakdown. If this is the case, we think that the pair will move lower once again and (at lest) test the recent lows. Nevertheless, if this support is broken, we may see a decline even to the mid-April low of 108.11 in the coming week.

Very short-term outlook: mixed with bearish bias
Short-term outlook: mixed
MT outlook: mixed
LT outlook: mixed

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective at the moment. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.

USD/CHF

Quoting our Monday’s alert:

(…) Although the pair rebounded on Friday, the shape of today’s candlestick suggests that another downswing is just around the corner. If this is the case, we’ll see a re-test of the recent lows (…)

Looking at the daily chart, we see that currency bears pushed USD/CHF lower as we had expected. Despite this drop, the green support zone triggered a rebound, which together with the buy signals generated by the daily indicators suggests that we may see a re-test of the yellow resistance zone in the coming days. Nevertheless, as long as there is no breakout above this major resistance zone, a bigger move to the upside is not likely to be seen.

Very short-term outlook: mixed with bullish bias
Short-term outlook: mixed
MT outlook: mixed
LT outlook: mixed

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective at the moment. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager

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