Despite expectations the US dollar weakened after the rate hike and FED press-conference last Wednesday. This occasion caused a huge growth of the EUR/USD currency pair and a creation of the support level 1.0669 – 1.0685. This level is very important, it’s the fixation zone of buyers, it means that until it is broker, we should consider only long positions. Besides it, we need to point out the fresh level of resistance 1.0769 – 1.0781, that stopped the growth of the price. Nevertheless, we should not sell from this level, we must trade its breakout.
That’s why we need to consider 2 scenarios for trading the euro
The pound, the same as the euro, grew up after the news last Wednesday. The new level of support was created 1.2256 – 1.2266, which concentrates huge volume inside it.
As you can see from the volumetric chart above, the growth of the price was on really huge volume and there are large concentrations of volume at the bottom. All these facts are “for” long positions. Unfortunately, there is no good point for enter now, because stop loss will be too big and a potential of the deal will be too small.
That’s why the only good scenario for purchases is to wait for the price’s smooth correction (approximately to 1.2322), a creation of the new volumetric support level and resumption of the growth. In such case long positions can be opened with the stop loss below the fresh level of support. A potential of the deal will be around 100 pips.
It is necessary to point out the resistance level 113.65 – 113.83, which have pushed the price lower. It is worth noting that there is no support at the bottom of the chart, that can stop the further fall of USD/JPY.
(it is a futures chart, i.е. JPY/USD).
Nevertheless, there is no good situation to sell now, that’s why we need to wait for a smooth correction of the price to the level 113.00. After the continuation of the fall, short positions can be opened. Stop loss should be placed at 113.55. A potential of the deal will be about 100-120 pips.
USD/CAD was unable to continue its fall and now is trading in the consolidation under the resistance level 1.3358 – 1.3384, which is a zone of control of sellers. It is important to note the support level of 1.3295, this is the lower boundary of the consolidation, in which a large volume is concentrated.
(it is a futures chart, i.e. CAD/USD)
Thus, sales can be opened only after the breakdown of the lower boundary of the consolidation – 1.3295 and the continuation of the price fall. Stop the loss should be set above a breakout bar. The first target is 1.3180, the second is 1.3110.
If the price breaks the resistance, it’s better to stay out of the market.
AUD/USD continues to trade slightly above the support zone 0.7625 – 0.7663 in the small consolidation, in which, nevertheless, large volume is concentrated. It is also important to note the price’s growth on large volume, which makes purchases in priority.
Longs can be opened only after the breakout of the consolidation up. In this case, the stop loss should be placed just below the consolidation. The potential of the deal is about 100 points.
XAU/USD like other majors had grew up after the rate hike and then continued its way up. Now it’s trading just below the resistance level 1230.90 – 1232.90, that have stopped the growth of the price. Also it is worth noting the level of support 1210.70 – 1214.50, which is an indicative level of the strength of buyers, so until this level is broken down, we should consider only long positions.
Situation for trading gold is the most perspective: the breakout of the resistance level on increased volume (it is very important) will be really great signal for opening long positions. In such case, stop losses should be set below the breakout bar. The target – 1250.00.
Sentiment: the mood of the market confirms all our scenarios for trading (work against the “crowd”), except USD/CAD which is in the consolidation right now. That’s why it is better not to trade this instrument.
The best deal: XAU/USD
Potentially good deal: EUR/USD
Stay out of the market: GBP/USD, USD/JPY, USD/CAD, AUD/USD