Earlier today, official data showed that German industrial production rose by 0.8% in Apr, beating analysts’ expectation, which pushed the euro slightly higher against the greenback. But did this increase change anything in the overall picture of EUR/USD?

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

• EUR/USD: none
• GBP/USD: short (stop-loss order at 1.4785; initial downside target at 1.4220)
• USD/JPY: none
• USD/CAD: none
• USD/CHF: none
• AUD/USD: none

EUR/USD

Looking at the above charts, we see that the overall situation hasn’t changed much since yesterday as EUR/USD remains in a narrow range around the 50% Fibonacci retracement. Therefore, our previous commentary on this currency pair is up-to-date:

(…) currency bulls pushed the exchange rate not only to our initial upside target, but also to the 50% Fibonacci retracement. Taking this fact into account and combining it with the current position of the indicators (the CCI and Stochastic Oscillator are overbought) it seems that reversal is just around the corner. Nevertheless, as long as there won’t be sell signals another attempt to move higher (to the 61.8% retracement and the May 11 and May 12 highs) is likely.

Very short-term outlook: mixed
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.

USD/JPY

From today’s point of view, we see that USD/JPY extended gains earlier today, which means that what we wrote yesterday is valid:

(…) USD/JPY declined sharply and reached the green zone in the previous week. (…) this support area triggered a rebound, which in combination with the current position of the indicators (they are very close to generating buy signals) and the medium-term picture suggests further improvement in the coming days. If this is the case, we may see a test of the lower red resistance line in the coming days.

Very short-term outlook: mixed with bullish 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 at the moment. We will keep you informed should anything change, or should we see a confirmation/invalidation of the above.

USD/CHF

On the daily chart, we see that USD/CHF is still trading under the medium-term red support line, which means that our yesterday’s commentary is up-to-date also today:

(…) the pair slipped under the medium-term red support line (based on the late Jan and Mar highs), which in combination with the medium-term picture and sell signals generated by the indicators suggests a test of the green support zone (created by the 61.8% retracement and the mid-May low) in the coming days.

Nevertheless, such price action would be more likely if the pair drops under the medium-term brown declining support line.

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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