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

• EUR/USD: short (a stop-loss order at 1.0735; the initial downside target at 1.0388)
• GBP/USD: short (a stop-loss order at 1.2590; the initial downside target at 1.2262)
• USD/JPY: long (a stop-loss order at 111; the initial upside target at 115.43)
• USD/CAD: long (a stop-loss order at 1.2949; the next upside target at 1.3424)
• USD/CHF: long (a stop-loss order at 0.9891; the initial upside target at 1.0180)
• AUD/USD: none

EUR/USD

From today’s point of view, we see that although currency bulls tried to push EUR/USD above the upper border of the blue declining trend channel earlier today, the exchange rate is still trading inside the formation. Therefore, as long as there is no confirmed breakout above the upper blue line our downside targets remain in place:

(…) the sell signals generated by the weekly indicators remain in place, suggesting that reversal is just around the corner. If this is the case, we’ll likely see a drop to around 1.0460 (the 76.4% and 78.6% Fibonacci retracements) or even to the lower border of the blue tend 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): Short positions with a stop-loss order at 1.0735 and the initial downside target at 1.0388 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/CAD

The first thing that catches the eye on the weekly chart is an invalidation of the breakdown under the lower border of the purple rising wedge. Additionally, the buy signals generated by the indicators are still in play, supporting currency bulls.

Having said the above, let’s check how did this increase affect the very short-term picture.

On Wednesday, we wrote the following:

(…) currency bulls (…) took the exchange rate to the yellow resistance zone, making our long positions more profitable. Will we see further improvement? Although the daily CCI and the Stochastic Oscillator climbed to their overbought areas, we think that as long as there are no sell signals another attempt to move higher is likely. If this is the case and USD/CAD increases from here, invalidating the earlier breakdown under the lower border of the purple rising trend channel seen on the weekly chart, we’ll see a move to around 1.3445, where the next resistance zone (created by the 76.4% and 78.6% Fibonacci retracements) is.

From today’s point of view, we see that USD/CAD extended gains and broke above the yellow resistance zone, which means that our upside target is still valid.

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 1.2949 and the initial upside target at 1.3424) 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

On the daily chart, we see that although USD/CHF moved a bit lower earlier today, the exchange rate remains above the previously-broken lower border of the blue rising trend channel, which means that an invalidation of the breakdown and its positive impact on the exchange rate is still in effect, suggesting further improvement. If this is the case, we’ll see a test of the upper line of the formation in the following days.

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 0.9891 and the initial upside target at 1.0180 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

Gold & Silver Trading Alerts
Forex Trading Alerts
Oil Investment Updates
Oil Trading Alerts