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

• EUR/USD: none
• GBP/USD: none
• USD/JPY: short (a stop-loss order at 114.68; the initial downside target at 111.84)
• USD/CAD: short (a stop-loss order at 1.3401; the initial downside target at 1.2934)
• USD/CHF: short (a stop loss order at 1.0081; the initial downside target at 0.9881)
• AUD/USD: none

EUR/USD

Yesterday, EUR/USD finished the day under the previously-broken yellow support/resistance line, which means that what we wrote in our last commentary on this currency pair remains up-to-date also today:

(….) the buyers pushed the pair above the yellow line once again, but as it turned out this improvement was very temporary, and EUR/USD pulled back, invalidating the breakout for the third time in a row. Such price action increases the probability that we’ll likely see further deterioration and a test of the lower border of the red declining trend channel (or even the recent lows) in the coming days.

GBP/USD

Earlier today, GBP/USD extended losses, increasing the probability that we’ll see a realization of our yesterday’s scenario in the very near future:

(…) GBP/USD slipped under the pink declining trend channel and closed the day below it, which suggests that we can see another downswing and a test of the medium-term blue support line based on the August and late-October lows (or even a drop to the previous lows) in the coming week. This scenario is also supported by today’s price action as currency bulls failed to hold GBP/USD inside the pink channel.

USD/JPY

`The overall situation in the very short term hasn’t changed much since yesterday as USDJPY is trading slightly below Monday’s intraday high inside the very short-term rising trend channel based on recent lows and the last week’s high. Taking this fact into account and combining it with the current position of the daily indicators, we think that the space for gains is limited (not only by the upper border of the above-mentioned trend channel, but also by the resistance zone created by the 76.4% and 78.6% Fibonacci retracements and the major resistance zone marked on the weekly chart in our last week’s alerts) and lower values of the exchange rate are just around the corner.

USD/CAD

Yesterday, USD/CAD bounced off the lower border of the pink rising trend channel (seen on the daily chart of the pair in our last week’s alerts) once again, which resulted in a comeback to the orange zone created by the 76.4% and the 78.6% Fibonacci retracements. Earlier today, we didn’t notice any important breakout or breakdown, which suggests that as long as there is no climb above the last week’s high or a drop below the lower line of the above-mentioned channel another bigger move is not likely to be seen. Nevertheless, taking into account the current position of the weekly indicators (it is very similar to what we saw at the end of June before “the summer” decline below the barrier of 1.3000), we continue to think that lower values of USD/CAD are jus a matter of time. When can we expect such deterioration? As we mentioned earlier, the pro-bearish scenario will be more likely and reliable if the sellers manage to close the day below the lower border of the pink rising trend channel. If the situation develops in tune with this assumption, the way to the previously-broken upper border of the red declining trend will be open.

USD/CHF

Earlier today, USD/CHF increased a bit above yesterday’s high, but is still trading under the resistances about which we wrote yesterday. Therefore, we believe that our Monday’s commentary on this currency pair is still valid:

(…) despite this increase (which is quite small compared to earlier declines as it didn’t even erase the November 19 drop), the exchange rate is still trading under the previously-broken lower border of the blue rising trend channel and the yellow resistance zone.

This suggests that another attempt to move lower may be just around the corner. If this is the case and the pair reverses from current levels, we’ll likely see a test of the 38.2% Fibonacci retracement or even the mid-October lows in the coming week.

AUD/USD

Although AUD/USD increased a bit yesterday, the green line based on the previous lows (which serves now as a resistance) stopped the buyers, triggering a pullback. Earlier today, the history repeated itself once again, which suggests that currency bulls may be too week to hold current levels, which could translate into a test of the mid-November lows in the following days. Nevertheless, despite this price action the exchange rate remains inside the blue consolidation, which means that as long as there is no breakdown below the lower border of the formation short-lived moves in both directions should not surprise us.

Thank you.

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

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