Although the USD Index moved a bit lower yesterday, the buyers didn’t give up and tried to push the greenback higher earlier today. Do they have more space for growth? Where can we see a reversal and what impact will it have on our currency pairs and our wallets?

• EUR/USD: short (a stop-loss order at 1.2653; the initial downside target at 1.1710)
• GBP/USD: short (a stop-loss order at 1.4549; the next downside target at 1.3810)
• USD/JPY: none
• USD/CAD: none
• USD/CHF: none
• AUD/USD: none

EUR/USD

Although the exchange rate moved a bit higher yesterday, currency bears pushed the pair lower earlier today, which suggests that we’ll see a re-test of the green support zone, the black dashed declining support line or even the March low in the coming day. This means that our short positions continue to be justified from the risk/reward perspective.

GBP/USD

Similarly, to what we wrote the case of EUR/USD, the exchange rate increased a bit (compared to the recent downward move) and tested the previously-broken lower border of the black triangle (marked with dashed lines on the daily chart, which we posted in our last commentary on this currency pair).

Earlier today, currency bulls tried to go north once again, but the above-mentioned resistance line stopped them triggering a pullback. This suggests that we’ll see further deterioration and at least one more downswing to around 1.3870 (the 76.4% Fibonacci retracement based on the March-April upward move) or even to 1.3810, where our next downside target is. What does it mean for our profitable short positions? That they continue to be justified from the risk/reward perspective.

USD/JPY

The very short-term situation in this currency pair improved significantly in the coming days as the pair broke not only above the upper line of the blue consolidation and the September 2017 low, but also above the previously-broken lower border of the blue declining trend channel and the 38.2% Fibonacci retracement. Such price action suggests that we can see one more upswing and a test of the 50% retracement around 109.66 in the coming days.

USD/CAD

Although the exchange rate moved higher once again on Monday, the neck line of the head and shoulders formation (marked with red on the daily chart posted in our last commentary on this currency pair) stopped currency bulls yesterday, triggering a pullback. Despite this drop, they didn’t give up and pushed the pair higher earlier today.

Nevertheless, we should keep in mind that the way to the north is blocked by the yellow resistance zone and late March highs. Therefore, as long as there is no breakout above this area, higher values of USD/AD are not likely to be seen.

Finishing this section, we would like to add that if we see a reliable sign of the buyers’ weakness in this area, we’ll consider re-opening short positions. We will keep you informed, so stay tuned.

USD/CHF

The pair extended gains and climbed to the important resistance area created by the upper border of the pink rising trend channel and the 76.4% and 78.6% Fibonacci retracements, which suggests that reversal may be just around the corner. Is we see such price action and reliable signs of the bulls’ weakness, similarly to what we wrote in the case of USD/CAD, we’ll consider opening short positions.

AUD/USD

Although the pair increased a bit yesterday, currency bulls didn’t show any sign of strength, which resulted in another pullback earlier today. This means that the pair will test the lower border of the blue declining trend channel, which you could see on the daily chart in our yesterday’s Forex Trading Alert.

Connecting the dots, all currency pairs reached their important support/resistance areas, which in combination with the current situation in the USD Index suggests that we’ll see reversals in the very near future. Therefore, as we mentioned earlier, if we notice reliable signals of the very short-term trend reversals, we’ll likely close our profitable short positions on EUR/USD and GBP/USD (yes, even before they reach our initial downside targets) and we’ll likely open opposing positions. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above. So, please, stay tuned.

On an administrative note, due to your Editor’s travel plans for the rest of the week, the next few alerts will be shorter than the ones that we’ve been publishing recently. Of course, we will keep an eye on the market and we’ll keep posting the alerts on a daily basis, plus intraday alerts whenever the situation requires it.

Thank you.

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

Gold & Silver Trading Alerts
Forex Trading Alerts
Oil Investment Updates
Oil Trading Alerts