From what I saw in a let's play video, you can't target your own units with Blizzard, it won't let you.

Instead what you have to do is target 2-3 squares away from your own units (in the screenshot this would be 2-3 spaces below the yellow soldiers) Once you set it up so the edge of the area of effect targets only the enemies it should work. 

I agree that this is confusing and it should highlight valid targets and invalid targets with very easy to notice markers so you understand whats going on.