Earlier today, the USD index declined to its lowest level since Jun 8 ahead of a Federal Reserve Chair Janet Yellen’s testimony. As a result, AUD/USD broke above important resistance zone. How high could the exchange rate go in the coming days?
In our opinion the following forex trading positions are justified - summary:
EUR/USD
Looking at the daily chart, we see that although EUR/USD gave up some gains yesterday, the pair didn’t invalidate earlier breakout above the upper border of the blue consolidation, which encouraged currency bulls to act earlier today. As a result, the exchange rate rebounded, which looks like a verification of earlier breakout and suggests another attempt to move higher. If this is the case and EUR/USD moves higher from here, we may see a test the Jun high and the 61.8% Fibonacci retracement in the coming days. Nevertheless, we should keep in mind that the current position of the indicators suggests that the space for gains may be limited and reversal is just around the corner.
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.
USD/CAD
On the above charts, we see that USD/CAD moved lower earlier today, which means that yesterday's commentary on this currency pair is up-to-date:
(…) the pair invalidated earlier breakout above the barrier of 1.3000, which suggests further deterioration and a test of the recent lows and the 70.7% Fibonacci retracement in the coming days.
Very short-term outlook: mixed with bearish 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.
AUD/USD
Yesterday, we wrote the following:
(…) AUD/USD closed the previous week above the red declining resistance line, which is a positive signal that suggests further improvement. How high could the exchange rate go in the coming days? If the pair increases from here, the initial upside target would be the orange resistance zone
Looking at the charts, we see that currency bulls pushed the pair higher as we had expected, which means that what we wrote yesterday is valid:
(…) if currency bulls manage to push the pair above this resistance zone, the next upside target would be around 0.7570, where the 61.8% Fibonacci retracement based on the entire recent downward move currently 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.