Earlier today, the euro extended gains against the U.S. dollar, but will we see further improvement in the coming days?

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

• EUR/USD: short (a stop-loss order at 1.0967; the initial downside target at 1.0521)
• GBP/USD: none
• USD/JPY: long (a stop-loss order at 107.62; the initial upside target at 111.16)
• USD/CAD: none
• USD/CHF: none
• AUD/USD: none

EUR/USD

Earlier today, EUR/USD extended gains and climbed to the previously-broken orange resistance line (based on the December and February highs) and the 61.8% Fibonacci retracement based on the entire March-April downward move, which could stop further improvement – especially when we factor in the proximity to the yellow resistance zone and the current position of the daily indicators. Nevertheless, if the exchange rate closes today’s session above the orange line and the 61.8% Fibonacci retracement we’ll consider closing short positions. As always, we’ll keep you - our subscribers - informed should anything change.

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

Trading position (short-term; our opinion): Short positions (with a stop-loss order at 1.0967 and the initial downside target at 1.0521) 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

Quoting our Tuesday’s alert:

(…) the pair reached not only the lower border of the brown declining trend channel, but also the lower line of the blue trend channel, which increases the probability of reversal in the very near future – especially when we take into account the current position of the daily indicators (…), which generated the buy signals.

From today’s point of view, we see that the above-mentioned support lines hold and the buy signals genrated by the indicators remain in place, which together suggest further improvement and (at least) a test of the green zone seen on the daily chart in the coming days. Therefore, in our opinion, opening long positions is justified from the risk/reward perspective.

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

Trading position (short-term; our opinion): Long positions (with a stop-loss order at 107.62 and the initial upside target at 111.16) 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.

AUD/USD

On the daily chart, we see that AUD/USD moved sharply lower in previous days and declined to the green support zone once again. Despite this drop, the key short-term support continues to keep declines in check. Nevertheless, the sell signals generated by the daily indicators remain in place, which suggests that a re-test of the strength of the recent lows can’t be ruled out.

Very short-term outlook:mixed
Short-term outlook: mixed with bullish bias
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, Gold & Silver Fund Manager

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