Like a freight train getting in motion, the euro also looks to be starting its move. This is not without consequences, as we’re keeping a close eye on the breach of several key chart features – that would make us pounce on the opportunity like a tiger. What else do we see across the currencies? For instance, our AUD/USD position continues doing well. See the rich details below.
EUR/USD – Relentlessly Pushing Down
The first thing that catches the eye on the above chart is the breakdown below the green support line. This line also serves as the neckline of a potential
head and shoulders formation. This is a bearish development, suggesting further deterioration.
However, bearish price action will be more likely and reliable only if the pair closes today’s session below this green line, with the bears taking the exchange rate also below the green support zone based on the previous lows. Until then, another rebound from this area - similarly to what we have seen in recent weeks - can’t be ruled out.
Please note that should we see a daily close below the above-mentioned supports, we’ll likely reopen short positions.
GBP/USD – Approaching the Downside Target
These are our Friday’s words regarding the Thursday’s upswing:
(…) The bulls pushed the cable even higher yesterday, testing the previously-broken lower border of the declining red trend channel. Although this is a positive development for the buyers, we have already seen similar price action earlier this month, and the way it resolved to the downside.
Back then, the bulls didn’t manage to hold gained ground, and another decline followed. Should the bulls be unable to close the day above this declining lower border, the probability of another bearish resolution increases. The pair would then likely retest the area of both green horizontal support lines, or even visit this week’s lows.
GBP/USD has indeed moved lower after its tiny intraday
breakout above the lower border of the declining red trend channel has been invalidated. In process, the pair also invalidated the earlier breakout above the declining orange trend channel. This doesn’t bode well for higher values down the road.
AUD/USD – Heading Lower after Breakout Invalidation
AUD/USD extended losses in recent days, making our short positions even more profitable. As the pair came back below the orange
resistance zone and invalidated Friday’s breakout above this area, further deterioration is probably just around the corner. This conclusion is supported by the sell signals of the daily indicators.
Summing up the Alert, EUR/USD is in the process of breaking below important supports, and should we see the bears closing the day below them, we’ll consider opening short positions. AUD/USD downswing continues, and the daily indicators together with the invalidation of recent breakouts support a downside move. Therefore, the short position is justified. 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
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All essays, research and information found above represent analyses and opinions of Przemyslaw Radomski, CFA and Sunshine Profits' associates only. As such, it may prove wrong and be a subject to change without notice. Opinions and analyses were based on data available to authors of respective essays at the time of writing. Although the information provided above is based on careful research and sources that are believed to be accurate, Przemyslaw Radomski, CFA and his associates do not guarantee the accuracy or thoroughness of the data or information reported. The opinions published above are neither an offer nor a recommendation to purchase or sell any securities. Mr. Radomski is not a Registered Securities Advisor. By reading Przemyslaw Radomski's, CFA reports you fully agree that he will not be held responsible or liable for any decisions you make regarding any information provided in these reports. Investing, trading and speculation in any financial markets may involve high risk of loss. Przemyslaw Radomski, CFA, Sunshine Profits' employees and affiliates as well as members of their families may have a short or long position in any securities, including those mentioned in any of the reports or essays, and may make additional purchases and/or sales of those securities without notice.