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

• EUR/USD: short (a stop-loss order at 1.1402; the initial downside target at 1.1009)
• GBP/USD: short (a stop-loss order at 1.3232; the initial downside target at 1.2375)
• USD/JPY: long (a stop-loss order at 107.62; the initial upside target at 113.08)
• USD/CAD: none
• USD/CHF: none
• AUD/USD: short (a stop-loss order at 0.7598; the initial downside target at 0.7385)

EUR/USD

Yesterday, we wrote the following:

(…) EUR/USD moved below the upper border of the blue consolidation (seen on the daily chart) once again, which together with the sell signals generated by the indicators suggests that may finally see a bigger move to the downside in the coming days. If this is the case, the first target for currency bears will be around 1.1150-1.1160. Nevertheless, if the pair closes today’s session below 1.1204, we’ll consider opening short positions.

From today’s point of view, we see that currency bears pushed the exchange rate lower (as we had expected) and the pair closes yesterday’s session below 1.1204. Taking this fact into account and combining it with the sell signals generated by the indicators, we think that EUR/USD will break under the lower border of the blue consolidation later in the day. Such price action will likely accelerate declines, which will likely result in a drop to (at least) the 38.2% Fibonacci retracement. Therefore, opening short positions is justified from the risk/reward perspective.

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 1.1402 and the initial downside target at 1.1009 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

Looking at the daily chart, we see that USD/JPY bounced off the support area created by the 76.4% and 78.6% Fibonacci retracements and increased to the blue line. Although this resistance could pause further improvement, the buy signals generated by the indicators remain in place, supporting currency bulls and higher values of the exchange rate. If this is the case, and USD/JPY breaks above the blue resistance line, the first upside target will be around 111.72-111.78, where the 50% Fibonacci retracement and late May highs are.

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

Trading position (short-term; our opinion): Long positions (with a stop-loss order at 107.62 and the initial upside target at 113.08) 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 daily chart, we see AUD/USD invalidated the earlier small breakout above the yellow resistance zone and the upper border of the blue rising trend channel, which together with the current position of the indicators suggests further deterioration. If this is the case and AUD/USD extends losses from current levels, we could see a decline even to the lower border of the blue trend channel in the coming week. Taking all the above into account, we believe that opening short positions is justified from the risk/reward perspective.

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 0.7598 and the initial downside target at 0.7385) 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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