Although today’s ADP report showed that the U.S. private sector added 205,000 jobs in the previous month (beating forecasts for an increase of 195,000), the USD Index declined sharply below the level of 98. What impact did this move have on the Euro, Swiss franc and Australian dollar?

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

• EUR/USD: short (stop-loss order at 1.1363; initial downside target at 1.0462)
• GBP/USD: none
• USD/JPY: none
• USD/CAD: long (stop-loss order at 1.3792; initial upside target at 1.4512)
• USD/CHF: none
• AUD/USD: none

EUR/USD

Looking at the above charts, we see that EUR/USD extended gains and climbed to the orange resistance zone and the previously-broken green resistance line (based on the Mar and Apr lows), which will likely stop further improvement in the coming days.

Very short-term outlook: bearish
Short-term outlook: bearish
MT outlook: bearish
LT outlook: mixed

Trading position (short-term; our opinion): Short positions (with a stop-loss order at 1.1363 and the initial downside target at 1.0462) 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/CHF

From today’s point of view, we see that the orange resistance zone (marked on the weekly chart) triggered a decline which took the exchange rate below the lower border of the yellow consolidation. Taking this fact into account, and combining it with sell signals generated by the indicators, we think that the pair will test the lower border of the green rising trend channel in the coming days.

Very short-term outlook: bearish
Short-term outlook: mixed with bearish bias
MT outlook: mixed
LT outlook: mixed

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective at the moment. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.

AUD/USD

Looking at the above charts, we see that although AUD/USD reversed and approached recent highs, the lower border of the rising trend channel (marked on the weekly chart) continues t keep gains in check Taking this fact and sell signals generated by the indicators into account, we think that another downswing is just around the corner.

Very short-term outlook: mixed with bearish bias
Short-term outlook: mixed
MT outlook: mixed
LT outlook: mixed

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

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