Today’s USD breather has brought relief to many other currencies earlier under pressure. The euro is recovering, and the bulls’ resolution looks to be put to test shortly as the nearest resistance is at hand. Will they overcome it? But what about the other pairs? Our open Canadian dollar position keeps doing fine – and there is one more piece of action today. A brand new position!
EUR/USD – Rebounding from Yesterday’s Lows
EUR/USD has moved down, almost touching the declining yellow trend channel’s lower border. Its proximity however encouraged the buyers to act. Should the price improvement last, we’ll see a bullish reversal formation – the morning star. This three-candlestick pattern would be complete should the pair close today’s session comfortably above 1.1000.
Additionally, the Stochastic Oscillator flashed its buy signal. This serves as further support for the bulls. All in all, the above signs suggest a test of at least the 38.2% Fibonacci retracement in the very near future.
USD/CAD – Breakout Invalidations Lead to More Downside
USD/CAD has invalidated its small breakout above the upper border of the black triangle that also surpasses the previous peaks. Earlier today, we’ve seen further deterioration after an unsuccessful attempt to move higher fizzled out – the pair trades at around 1.3280 in the very aftermath of today’s Bank of Canada monetary policy decision.
Let’s take a look at the daily indicators. The Stochastic Oscillator has flashed its sell signal, and additionally shows a bearish divergence with the exchange rate itself.
All the above suggest more downside, and our short position remains therefore justified. Should the exchange rate go on to decline from here, the initial downside target will be at around 1.3198, where the size of the downward move would correspond to the height of the triangle the pair has broken down from. This is also where the 61.8% Fibonacci retracement is.
USD/CHF – Another Case of Lucrative Invalidations
USD/CHF has yesterday invalidated the tiny breakout above the upper border of the rising green trend channel. The breakout above the declining red resistance line has also been invalidated in the process.
Such price action has led to the daily indicators generating their sell signals. Connecting the dots, opening short positions is justified from the risk/reward perspective.
Summing up the Alert, EUR/USD has reversed higher from the proximity of the lower border of its new trend channel, and looks set to target at least the 38.2% Fibonacci retracement in the very near future. USD/CAD bulls went on to give up all of their gains and then some after verifying the earlier breakdown below the lower border of the black triangle. The short position remains justified. USD/CHF has just invalidated two breakouts, and this setup leads us to open a short position. Apart from these, there’re no other opportunities worth acting upon in the currencies.
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Thank you.
Nadia Simmons
Forex & Oil Trading Strategist
Sunshine Profits – Effective Investments through Diligence and Care
THIS ARTICLE ORIGINALLY POSTED HERE.
