Earlier today, Australian dollar increased against its U.S. counterpart, but did this move change anything in the short-term perspective?

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: long (a stop-loss order at 1.2931; the initial upside target at 1.3436)
• USD/CHF: none
• AUD/USD: short (a stop-loss order at 0.7683; the initial downside target at 0.7444)

EUR/USD

On the daily chart, we see that EUR/USD moved higher once again, however, it looks like a repeat of what we already saw in the previous week. Therefore, our Monday’s commentary on this currency pair is still up-to-date:

(…) the yellow resistance zone marked on the weekly chart continues to keep gains in check, which suggests that another downswing may be just around the corner. If this is the case and the pair extends declines from current levels, the initial downside target will be around 1.1017, where the 38.2% Fibonacci retracement and the green support zone (marked on the daily chart) are.

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

Quoting our last commentary on this currency pair:

(…) USD/JPY bounced off the support area created by the 76.4% and 78.6% Fibonacci retracements once again, which resulted in a breakout above the blue resistance line and a climb to slightly below the 50% Fibonacci retracement based on the recent downward move. (…) this resistance level could trigger a pullback in the coming day(s), (…)

Looking at the daily chart, we see that USD/JPY moved a bit lower and stuck in the blue consolidation under the orange resistance zone, which makes the very short-term picture a bit unclear.

Nevertheless, when we zoom out our picture and take a look at the weekly chart, we notice that USD/JPY is still trading above the previously-broken upper border of the brown declining trend channel, which together with the buy signals generated by the indicator suggests further improvement in the coming weeks (even if we see a very short-term pullback first).

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 that AUD/USD increased slightly and moved to the previously-broken upper border of the blue rising trend channel earlier today. Such price action looks like a verification of the earlier breakdown and suggests further deterioration in the coming days. How low could the exchange rate go? We believe that the best answer to this question will be the quote from our Wednesday’s alert:

(…) In our opinion, the initial downside target will be around 0.7444, where the 61.8% Fibonacci retracement is. However, if this support is broken, the next target will be the lower border of the blue rising trend channel (currently around 0.7405). 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 0.7683 and the initial downside target at 0.7444) 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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