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

• EUR/USD: short (a stop-loss order at 1.1052; 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

Looking at the daily chart, we see that although EUR/USD is still trading in the blue consolidation, currency bulls pushed the exchange rate higher earlier today. As a result, the pair climbed above the March peak, invalidating the earlier breakdown, which suggests that we’ll likely see a test of the upper border of the formation and an increase to the upper line of the brown rising trend channel and the 61.8% Fibonacci retracement in the coming day(s).

Nevertheless, as long as there is no breakout above this resistance area, lower values of the exchange rate are more likely than not.

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

Trading position (short-term; our opinion): Short positions (with a stop-loss order at 1.1052 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/CHF

From the daily perspective, we see that USD/CHF broke above the upper border of the brown declining trend channel and closed yesterday’s session above it. Despite this positive event, currency bulls pushed the exchange rate lower earlier today, which suggests that we’ll see (a least) a verification of the breakout later in the day. If this support holds, it will be a positive event, which will likely encourage currency bulls to act and translate into rebound. Nevertheless, in our opinion, further improvement will be more likely and reliable only if the pair breaks above the upper line of the blue consolidation. Until this time, short-lived moves in both directions should not surprise us. However, if USD/CHF climbs above this resistance, we’ll consider opening long positions.

Very short-term outlook: mixed with bullish bias
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.

AUD/USD

Looking at the above charts, we see that although AUD/USD broke below the lower border of the blue consolidation (marked on the weekly chart), the 50% Fibonacci retracement together with the upper border of the orange declining trend channel (both seen on the daily chart) stopped further declines, triggering a pullback. In this way, the exchange rate invalidated not only the breakdown under the green support zone, but also the breakdown below the lower line of the blue consolidation, which is a positive signal and suggests further improvement. If this is the case, and AUD/USD moves higher from here, the initial upside target will be around 0.7638, where the upper line of the blue consolidation is.

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. 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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