After a hard month currency bulls begin to recover. Yesterday's session brought a strong rebound and earlier today EUR/ USD returned above 1. 1700. Where can the currency bears lurk to attack again?
In our opinion the following forex trading positions are justified - summary:
EUR/USD
Yesterday, we wrote the following:
(…) EUR/USD rebounded and came back above the November 2017 low, which suggests that we could see a daily closure above this level and invalidation of the earlier breakout, which would be in line with our yesterday’s assumptions.
From today’s point of view, we see that the situation developed in line with the above scenario, which suggests that higher values of the exchange rate are ahead of us – especially when we factor in the buy signals generated by the indicators.
How high could the pair go in the coming days?
In our opinion, the first upside target will be around 1.1755, where the 23.6% Fibonacci retracement based on the entire 2018 decline is. If it is broken, we may see a move even to the yellow resistance zone, which is currently reinforced by the next retracement (around 1.1907).
Trading position (short-term; our opinion): No positions 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.
GBP/USD
Quoting our yesterday's alert:
(…) GBP/USD reacted quite similarly and moved slightly higher, which will likely trigger buy signals in all daily indicators in the very near future (maybe even later in the day or tomorrow).
As you see on the daily chart, the situation developed in line with our assumptions, which just like in the case of EUR/USD, suggests higher values of the exchange rate in the very near future.
If this is the case and the pair extends gains, we’ll likely see a test of the previously-broken yellow resistance zone, which is currently reinforced by the 23.6% Fibonacci retracement based on the entire downward move, which started in mid-April.
Trading position (short-term; our opinion): No positions 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 above chart, we see that the overall situation hasn’t changed much in recent days which means that what we wrote in our previous alerts (on Tuesday and on Wednesday) about this currency pair is up-to-date also today.
Trading position (short-term; our opinion): No positions 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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