USD/CAD Continues Decline

Currencies / Forex Trading May 25, 2017 - 03:10 PM GMT

Earlier today, USD/CAD broke below the 38.2% Fibonacci retracement. How low could the exchange rate go in the coming days?

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

EUR/USD: none
GBP/USD: none
USD/JPY: long (a stop-loss order at 107.62; the initial upside target at 111.16)
USD/CAD: none
USD/CHF: none
AUD/USD: none

EUR/USD

Looking at the daily chart, we see that although EUR/USD moved a bit higher earlier today, the exchange rate is still trading under 200% Fibonacci extension and the 70.7% Fibonacci retracement (marked on the weekly chart), which means that what we wrote yesterday is still valid:

(…) EUR/USD reached upside targets as we had expected. Although this is a bullish development, we should keep in mind that daily and weekly indicators are overbought and very close to generating sell signal, which increases the probability of reversal and lower values of EUR/USD in the coming days.

Very short-term outlook: mixed
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 at the moment.

GBP/USD

From today’s point of view, we see that although GBP/USD moved little lower earlier today, the pair remains in the blue consolidation above the upper border of the brown rising trend channel. Nevertheless, all indicators generated the sell signals, which suggests that reversal may be just around the corner. Therefore, if he pair drops under the lower border of the consolidation, the upper line of the brown rising trend channel and the red support line based on the previous lows, we’ll see further deterioration. In this case, we’ll likely open short positions.

Very short-term outlook: mixed with bearish bias
Short-term outlook: mixed with bearish bias
MT outlook: mixed with bearish bias
LT outlook: mixed

Trading position (short-term; our opinion): No positions are justified from the risk/reward perspective at the moment.

USD/CAD

On the daily chart, we see that USD/CAD broke below the 38.2% Fibonacci retracement based on the entire January-May upward move, which means that what we wrote about this currency pair on Monday is up-to-date:

(…) it seems to us that the par will extend losses and test the 38.2% Fibonacci retracement based on the entire January-May upward move. If this support is broken, we’ll see a decline to the next Fibonacci retracement and the lower border of the brown rising trend channel. However, the current position of the daily indictors indicates that reversal in the coming week should not surprise us.

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 at the moment.

Thank you.

Nadia Simmons
Forex & Oil Trading Strategist
Przemyslaw Radomski
Founder, Editor-in-chief

Sunshine Profits: Gold & Silver, Forex, Bitcoin, Crude Oil & Stocks
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Disclaimer

All essays, research and information found above represent analyses and opinions of Nadia Simmons 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, Nadia Simmons 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. Nadia Simmons is not a Registered Securities Advisor. By reading Nadia Simmons’ 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. Nadia Simmons, 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.

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