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

• EUR/USD: none
• GBP/USD: short (a stop-loss order at 1.2576; the initial downside target at 1.2157)
• USD/JPY: none
• USD/CAD: none
• USD/CHF: none
• AUD/USD: short (a stop-loss order at 0.7873; the initial downside target at 0.7498)

EUR/USD

On the above charts, we see that EUR/USD is still wavering around the orange support/resistance line based on the December and February highs, which suggests that our Tuesday’s commentary on this currency pair is up-to-date also today:

(…) the exchange rate approached the February high and reached the yellow resistance zone. Additionally, there are negative divergences between the CCI and the Stochastic Oscillator and the exchange rate, which suggests that reversal may be just around the corner.

(…) slightly above the current levels there are two important Fibonacci retracements: the 50% retracement based on the November-January downward move and the 38.2% retracement based on the entire May – January decline, which increases the probability of reversal in very near future – especially when we factor in the long-term picture of the exchange rate.

On the monthly chart, we see that the exchange rate reached the previously-broken long-term green line, which looks like another verification of the earlier breakdown. If this is the case, EUR/USD will reverse and decline from current levels in the coming week.

Very short-term outlook: mixed
Short-term outlook: mixed with bearish bias
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.

GBP/USD

From today’s point of view, we see that although GBP/USD moved higher yesterday, the proximity to the yellow resistance zone encouraged currency bears to act, which resulted in a drop below the previously-broken 61.8% Fibonacci retracement. In this way, the exchange rate invalidated the earlier breakout, which is a bearish development, which suggests further deterioration (especially if the pair closes today’s session under the retracement). Additionally, the CCI and the Stochastic Oscillator generated the sell signals, which increase the probability of decline in the coming week. If this is the case and GBP/USD moves lower from current levels, the initial downside target for currency bears will be around 1.2333-1.2338, where this week’s lows are. If this support is broken, we’ll see a decline to the March lows and the green support zone in the coming week.

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

Trading position (short-term; our opinion): Short positions with a stop-loss order at 1.2576 and the initial downside target at 1.2157) 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

Looking at the charts, we see that AUD/USD extended losses below the lower border of the red rising trend channel, which means that our last commentary on this currency pair is up-to-date also today:

(…) the exchange rate dropped under the previously-broken lower border of the red rising trend channel, which is an additional bearish development. Taking all the above and the sell signals generated by the indicators into account, we believe that opening short positions is justified from the risk/reward perspective. How low could the exchange rate go in the coming days? In our opinion, the initial downside target will be the March low and the green support zone.

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

Trading position (short-term; our opinion): ): Short positions (with a stop-loss order at 0.7873 and the initial downside target at 0.7498) 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.

Thank you.

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

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