Since the beginning of the week, the British pound has climbed against the greenback, which resulted in an increase to the resistance zone created by two Fibonacci retracements. Will they stop currency bulls in the coming days?

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

• EUR/USD: long (a stop-loss order at 1.1260 the initial upside target at 1.1544)
• GBP/USD: none
• USD/JPY: short (a stop-loss order at 114.62; the initial downside target at 111.84)
• USD/CAD: short (a stop-loss order at 1.3299; the initial downside target at 1.2934)
• USD/CHF: short (a stop loss order at 1.0128; the initial downside target at 0.9881)
• AUD/USD: none

EUR/USD

Looking at the daily chart, we see that EUR/USD pulled back after the pair reached the 38.2% Fibonacci retracement and approached the upper line of the very short-term purple rising trend channel.

Earlier today, we saw one more downswing, which looks like a verification of yesterday’s breakout above the short-term red declining line. If this is the case, the exchange rate will rebound from this area and re-test the strength of the above-mentioned resistances in the very near future.

Trading position (short-term; our opinion): Long positions with the stop-loss order at 1.1260 and the initial upside target at 1.1544 are justified from the risk/reward perspective.

GBP/USD

On the daily chart, we see that GBP/USD extended gains in recent days, which caused a breakout above the previously-broken orange resistance line. Thanks to this week’s upward move, the pair climbed to the resistance area created by the 76.4% and the 78.6% Fibonacci retracements, which triggered a pullback earlier today.

Such price action looks like a verification of yesterdays breakdown, which suggests that we can see one more upswing from current levels. If currency bulls manage to push the exchange rate higher, we’ll see a test of the upper border of the pink declining trend channel during the following sessions.

Nevertheless, if they fail and GBP/USD closes one of the upcoming sessions under the orange line, we’ll consider opening short positions. We’ll keep you - our subscribers - informed should anything change.

Trading position (short-term; our opinion): None positions are justified from the risk/reward perspective.

AUD/USD

From today’s point of view, we see that AUD/USD extended gains and climbed to the orange resistance zone created by the September peaks and the 23.6% Fibonacci retracement (based on the entire 2018 downward move), which increases the probability of reversal in the coming days – especially when we factor in the current position of the daily indicators (the CCI and the Stochastic Oscillator are overbought and very close to generating the sell signals).

If we see currency bulls’ weakness in the above-mentioned area and the sell signals, we’ll consider opening short positions.

Trading position (short-term; our opinion): None positions are justified from the risk/reward perspective.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski, CFA
Founder, Editor-in-chief, Gold & Silver Fund Manager

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