Tuesday's FX: Here's What Happened
Sunshine Profits | Jul 16, 2019 04:57PM ET
After Monday's relative indecision, currencies were on the move Tuesday. That was especially true of the euro. Does it look to you like lower values are just ahead, or can the bulls stem the decline? It's not about the euro only though – we've seen pretty interesting action in the Australian dollar as well. The question is whether its upswing has changed the outlook, or not. Let's dive into these pressing questions and turn the resulting knowledge into something beneficial.h3 EUR/USD Rolled Over To the Downside/h3
EUR/USD has moved sharply to the downside, making our short positions more profitable. It broke below Friday's lows, opening the way further south. The daily indicators continue to support the downswing and we may see the Stochastic Oscillator issue its sell signal soon.
Therefore, our downside target remains up-to-date and the bears can aim to make a test of the July lows as a minimum.
h3 USD/JPY: Consolidating Or Not?/h3Overall, the situation hasn't changed much as USD/JPY keeps trading sideways in a very narrow range around the upper border of the green support zone. Looking at the daily indicators, though, we see that they are on sell signals. Which means that one more downswing and a test of the lower border of the green support zone and the early July low is probable.
h3 AUD/USD: Still Likely To Reverse Down/h3Monday's AUD/USD upswing took the market to the vicinity of our waiting order. This fact coupled with the bearish outlook described below, makes us move the stop-loss higher to preempt a possible stop-run move. While Monday's move higher may look encouraging, it only took the pair to the resistance area created by the early May and early July peaks – and the pink gap.
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Such a strong combination of resistances has been enough to stop the bulls at the beginning of this month already. It suggests that as long as the gap is open, another downward reversal from here – with further declines – remain very likely indeed.
Should the pair move lower from here, we'll see at least a test of the last week's low in the following days. Such a move would be supported by the current positioning of the daily indicators.
h3 Summing Up/h3the EUR/USD rebound gave way to Tuesday's downswing and the profitable short position is justified. AUD/USD looks unable to add to Monday's gains, as its strong combination of nearby resistances has stopped the bulls. As the same thing happened earlier this month already, the short position remains justified. Taking into account the possibility of a stop run, we're moving the stop-loss a bit higher. Apart from these, there're no other opportunities worth acting on in the currencies. As always, we'll keep you informed.
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