Looking at the daily chart of USD/CHF we can summarize the recent days in one word: boredom. But behind the current consolidation there may be something more than we think at first glance.

EUR/USD

On the daily chart, we see that although currency bears tried to push EUR/USD under the lower border of the blue consolidation, they failed yesterday and also earlier today. Such price action doesn’t look encouraging considering our short positions, but the trading day in the U.S. is still ahead of us, which means that the bears have a lot of time to change the situation and win today’s session.

Why should something like that happen? Firstly, the sell signals generated by the indicators remains in the cards, suggesting lower values of the exchange rate in the coming days. Secondly, the 38.2% Fibonacci retracement based on the entire 2008-2017 downward move (which serves as the key resistance at the moment of writing these words) continues to keep gains in check. Thirdly, two pro bearish candlestick formations are still in play, reinforcing the resistance area.

What does it mean for EUR/USD? In our opinion, even if we see further improvement currency bulls will have to invalidate the shooting star (we wrote more about this formation yesterday) and break above the upper line of the consolidation. In other words, we believe that as long as there is no daily/monthly closure above these levels and the 38.2% retracement a bigger move to the downside is a more credible scenario.

USD/CAD

Looking at the above charts, we see that the overall situation in recent days hasn’t changed much as USD/CAD is trading in a narrow range (the green consolidation) inside the black declining trend channel.

What does it mean to us? That as long as there is no breakout above the upper line of the channel or a breakdown under the lower line opening any positions is not justified from the risk/reward perspective.