The Euro, The Yen, The Loonie: Really The Same Old Song?

Euro looks to be dealing us yet another day characterized as more of the same. Many of you would ask here, does the upswing have legs? Or is it rather a dead cat bounce? Armed with insights to the teeth, it still requires patience to let the market reveal its true colors. Not asleep at the wheel in the meantime, we carefully examine the standing of our other open positions. High time to update you.

EUR/USD – How Serious Are The Bulls Actually?

Attempting to build on yesterday’s upside momentum, EUR/USD extended gains earlier today. The result is a climb above the yellow resistance zone the importance of which we discussed yesterday:

(…) the very short-term yellow resistance zone created by three Fibonacci retracements: the 61.8% based on the Thursday’s sharp decline, the 38.2% based on the late-February-early March downward move and the 23.6% based on the entire October-March move.

Despite this improvement, the combination of the 76.4% and 78.6% Fibonacci retracements stopped the buyers. As long as we don’t see any breakout above the peak of Thursday’s candlestick, it looks like another attempt to move lower is just around the corner.

If that’s indeed the case, we’ll likely see at least a test of the last week’s lows or even the lower border of the blue declining trend channel in the following days.

USD/JPY – Hanging On By Its Fingernails

USD/JPY looks to be striving hard to remain inside the pink rising wedge. Bouncing a bit yesterday but the upside move appears to be fizzling out as the pair currently trades at around 111.20.

It means that USD/JPY is moving lower once again and trades back below the lower border of the pink wedge. This increases the likelihood of further deterioration in the coming days.

Should we see a daily close below the above mentioned wedge border, the pair will likely extend losses and test the lower border of the blue rising trend channel (currently at around 109.93). Additionally, there’s the 50% Fibonacci retracement nearby. Considering the size of the pink wedge in approximating the potential price target, with sufficient commitment currency bears can comfortably push USD/JPY down to around 109.94. That’s as close as it gets in target setting really – both approaches are giving virtually identical targets.

USD/CAD – Bouncing From Support?

We observed USD/CAD attempting to extend gains late in the previous week that were met with a subsequent pullback. We mentioned on Friday that this:

(…) could be nothing more than a verification of the earlier breakout above the yellow resistance zone.

Indeed, this still looks to be the case today. Therefore, as long as there is no daily close below the yellow resistance-turned-support zone, another attempt to move higher wouldn’t surprise us in the least.

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Nadia Simmons

Forex & Oil Trading Strategist

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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.