After the release of good macroeconomic data for the economy of the USA, EUR/USD started its correction and now is trading inside its level of support 1239.60 – 1242.60. It is necessary to note that the fall was on low volume, so it’s too early to consider a reverse of the market. The presence of a volumetric accumulation below the level also supports the currency pair.
So until the breakdown of the support, we should consider long positions. We can enter the market only after a strong rebound of the price from the level 1239.60 – 1242.60 on large volume. It will be a sign that the correction is over and bulls regain its lead. Stop loss should be set below the support. The target is the local maximum.
If the price breaks down the support, it’s better to stay out of the market.
GBP/USD has already broken down the level of support and continued falling. It’s necessary to point out that this move was on medium volume and pretty high bid deltas. So now it’s not advised to open long positions.
Nevertheless, short positions should not be considered at the moment too, because there are a strong uptrend and level of support 1.2256 – 1.2266, which is an indicative level of the power of buyers. Only after its breakout it is advised to sell GBP/USD.
Before that it’s better to stay out of the market.
USD/JPY failed to continue falling and now is trading in the local consolidation near its global minimums. We need to note that the correction of the price was on low volume, so it does not seem like a reversal signal. So we can enter the market and sell this currency only after the breakout of the local minimum on increased volume. Stop loss should be set above the breakout bar. The potential of the deal is about 150 pips.
If the price continues its growth, it’s better to stay out of the market for this instrument. Long positions should be opened only after the breakout of the level 113.65 – 113.83.
The situation for the USD/CAD currency pair remains the same, it is trading inside the consolidation. Yes, the price is trading near the higher boundary of the consolidation, but we still have two weak currencies here, so it’s too risky to trade this instrument now.
AUD/USD had tested the support level 0.7610 and returned back into the consolidation. It is necessary to point out that the growth of the price was on small volume, so it is unable to buy this instrument now. Nevertheless, it is not advised to sell it as well, because we don’t have a good place for a stop loss and is trading inside the consolidation. That’s why it’s better to stay out of the market for this instrument too.
After the release of excellent macroeconomic data on the US economy, XAU/USD corrected and traded slightly above its support level of 1239.60 – 1242.60, which is the cornerstone in the gold trading. It is worth noting that the correction was on volume, just below the average, so it’s too early to speak about any reverse. It should also be noted that a large accumulation of volume is concentrated near the level, which also serves as an additional support for the price.
Nevertheless, after such a confident fall, it is worthwhile to open long positions only after an appearance of an additional signal. In this case it is a test of the support level and the rebound of the price on large volume (it is a must!). This will be an excellent signal about the end of the correction and the fact that the bulls once again returned the advantage to itself. In this case, the stop loss should be placed just below the level of 1239.60 (if the price breaks down the level and jumps up sharply, then it should be set below daily low). The target is the local maximum.
Sentiment: despite the confirmation of all our deals by the mood of the market, some of the instruments (GBP, AUD, CAD) should not be traded at the moment because of poor trading situation.
The bottom line: EUR/USD and XAU/USD have the best situations for trading now.