The USD Index keeps relentlessly pushing higher. The euro has come under pressure earlier today though it's recovering. How close are we to the euro flashing a buy signal and how strong would that have to be to make us act? Is it time to change sides and make another quick buck or two this way? And what about the other profitable positions?
EUR/USD - A Moment of Indecision?
The weekly chart shows that the pair is still trading below the previously-broken lower border of the red declining trend channel. This doesn't bode well for the bulls going forward.
Yesterday's session brought us a timid attempt at a reversal. The bulls have given up most of their gains and the end result is a verification of the breakdown below the orange support zone. This verification didn't have enough power to take the pair to the previously-broken lower border of the rising purple support line.
Earlier today, the bears took the reins again and the pair is currently trading at around 1.1150. It looks like the third close after breaking below the rising purple support line is at hand, supporting the prospects of making our short position even more profitable. Both the CCI and Stochastic Oscillator remain in their oversold areas and they haven't issued any buy signals yet.
USD/JPY - Racing to Close the Gaps
Last week, the USD/JPY bulls managed to close the lower orange gap. This has triggered further improvement earlier this week.
The daily chart reveals that the pair broke above the upper border of the green consolidation. Combined with the daily indicators having generated their buy signals, the pair could rise even to around 110.67. This where the size of the upward move would correspond to the height of the green consolidation it has broken above from.
USD/CHF - Bearish Sentiment Rising
We'll start again with the long-term chart. This time, it'll be the monthly chart. The major long-term orange resistance zone continues to keep gains in check.
After yesterday's down session, USD/CHF has moved higher earlier today and retested the upper border of the green consolidation. This is where Monday's peak and the lower red gap area are.
Looking at yesterday's bearish candle gives insight into the bears' strength. As long as there is no daily close above the lower red gap, another move to the downside remains likely.
If USD/CHF extends losses from here, we could see it drop to the lower border of the green consolidation that marks recent lows. Even a test of the 38.2% Fibonacci retracement in the coming week isn't out of the question.
Summing up the Alert, yesterday's upswing in the euro has failed and the bears have the initiative again. Our short position remains justified. The USD/CAD upswing has fizzled out at the strong combination of resistances and our already profitable short position is also becoming even more profitable. There're no other opportunities worth acting upon in the currencies. As always, we'll keep our subscribers informed.
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Forex & Oil Trading Strategist
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