Although today’s data showed that new home sales rose 1.1% in February in Australia, the numbers disappointed market participants as they saw a 1.8% increase the previous month. Additionally, yesterday’s solid data from the U.S. economy continued to support the greenback, which together pushed AUD/USD below its last support line before Mar lows. Double bottom or fresh 2015 lows?
In our opinion the following forex trading positions are justified - summary:
- EUR/USD: none
- GBP/USD: none
- USD/JPY: none
- USD/CAD: short (stop loss order at 1.2876)
- USD/CHF: none
- AUD/USD: none
EUR/USD
The sitution in the medium term hasn’t changed much as EUR/USD still remains above the previously-broken the long-term green support/resistance line. Today, we’ll examine the daily chart and look for more clues about future moves.
Looking at the daily chart, we see that EUR/USD closed yesterday’s trading day under the upper line of the declining trend channel, which means that what we wrote in our previous Forex Trading Alert is up-to-date:
(…) EUR/USD came back to the trend channel, which is a negative signal. In our opinion, if the pair closes the day below the upper line of the formation, we might see further deterioration and a drop to around 1.0580, where the lower line of the consolidation (and the Mar 18 low) is. At this point, it is worth noting that sell signals generated by the CCI and Stochastic Oscillator are still in place, supporting the bearish case.
Very short-term outlook: bearish
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 at the moment. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.
GBP/USD
The medium-term picture remains unchanged as GBP/USD is trading in a consolidation. In today’s alert we’ll take a closer look at the daily chart and find out what we can infer from it.
From this perspecive, we see that although GPB/USD rebounded slightly yesterday, the exchange rate still remains under the previously-broken red resistance line. This means that our last commentary on this currency pair is valid:
(…) Taking this deterioration into account, and combining it with sell signals generated by the indicators, it seems to us that the pair will move lower and test the lower line of the consolidation in the coming days.
Very short-term outlook: bearish
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 at the moment. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.
AUD/USD
The medium-term outlook hasn’t changed much as AUD/USD still remains under the Jul 2009 lows. Having said that, let’s focus on the very short-term changes.
The frst thing that catches the eye on the above chart is a breakdown under the green support line based on the recent lows. This is a negative signal, which suggests that the bearish scenario from our last Forex Trading Alert will be in play in the coming day(s):
(…) if the exchange rate closes the day uner the green support line based on the recent lows (…) the initial downside target would be at 0.7559 (the Mar 11 low). Please note that if it is broken, the next target for currency bears would be around 0.7542, where the 127.2% Fibonacci extension is.
Very short-term outlook: bearish
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 at the moment. 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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