The euro bulls have been unable to sustain most of Friday’s gains, let alone build on them yesterday. Does it mean the return of range-bound euro, or is there more downside on the immediate horizon? After Monday’s strong showing of USD/JPY bulls, the same question goes to this pair too. Yet it’s a different pair that has just made us jump into the action with both feet.
EUR/USD
EUR/USD moved sharply lower yesterday, invalidating the earlier breakout above the upper border of the blue consolidation. This is a bearish development.
Earlier today, the bulls tried to take the pair higher, but the exchange rate still trades inside the blue consolidation. This suggests that we could see a test of the lower border of the formation and the green horizontal
support line in the very near future.
USD/JPY
The first thing that catches the eye on the daily chart is yesterday’s fresh August low. The downswing took the exchange rate below the green support zone, the lower line of the declining grey trend channel and the lower border of the declining red trend channel.
The buyers however quickly invalidated all three breakdowns, and the pair swiftly moved to the upside. This upswing closed the Monday’s opening gap, which looks encouraging for the buyers.
Nevertheless, the current position of the daily
indicators suggests that one more slide aiming to test the above-mentioned supports can’t be ruled out. This is especially the case when we factor in the bulls being unable to build on yesterday’s huge white candle.
Summing up the Alert, EUR/USD has again reversed lower, and could very well retest its recent lows. USD/JPY bulls’ show of strength has been a one day phenomenon only, and neither the USD/CHF bulls’ action justifies opening long positions. Yet it’s another pair that has just made us take action, and you’re encouraged to read on and find out which. 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.