The euro continued its correction and tested the level of resistance 1.0617 – 1.0633, after which the price rebounded back and now is trading below this level. It is worth noting that the growth of the price was on rather small volume, so it can be considered as a technical correction of the pair.
With this upward move we have a pretty good situation for opening short positions. We can enter the market either now, or after a beginning of the fall on increased volume (more conservative scenario). A stop loss should be placed above the level 1.0670. The target is 1.0500.
The pound showed a strong growth of the price and totally covered the downward move after the release of the payrolls last Friday. This growth was on medium volume, so it can’t be considered as a reversal signal.
Globally, the pair is in the consolidation. Also it is impossible to point out any new levels that can be used in trading. So now the situation for trading is pretty complicated and I advise you just to skip this instrument from your trading plan for today and wait for further behavior of the price.
The yen has broken down the level of support 110.20 – 110.43 and now is trading way below this level. The breakdown move was on really large volume that shows us the strength of the sellers. Also we need to highlight the new level of resistance 109.65 – 109.85.
So now we need to open only short positions for USD/JPY. We can enter the market after a smooth correction of the price to the resistance, because if we open a short position now, a stop loss will be too big. The potential of the deal 100-120 pips.
The situation for the Canadian dollar remains the same – it’s trading in the consolidation. Unfortunately, we can’t highlight any new volumetric levels, because volume is spread across the chart. The best decision is to stay out of the market, moreover crude oil inventories and the BOC rate statement will be published today.
We need to highlight the new level of resistance 0.7475 – 0.7481 where large volume is concentrated which stopped the fall of the price. So now we can reopen short positions only after a confident breakdown of this level on increased volume. A stop loss should be placed above the volumetric breakout bar. A potential of the deal is around 100 pips.
On the background of the weakening of the US dollar gold showed impressive growth and broke through the resistance level on large volume. It is important to note that the price movement was very sharp and after the breakdown of the resistance level the price was confidently fixed higher, which indicates the strength of the buyers.
It is necessary to allocate a new level of support 1265.70 – 1267.90, in which a large volume is concentrated and from which the breakout movement has begun.
From the volumetric chart above, you can see that the main volume accumulation is at the bottom, so we can conclude that in the consolidation the bulls gained positions.
Given all these facts and a sharp change in the direction of the price (complete overlap of the fall of gold after the payrolls), it is worth considering long positions as the main trading option for this instrument.
It is desirable to enter the market after a small correction of the price to the level of support in order to obtain an acceptable stop loss, which must be placed under the level of 1260.00. From this level the price started its rapid growth on Tuesday. A potential of the deal is about 200 points.
The sentiment: all our scenarios (except GBP and CAD, which is better to skip today) are confirmed by the mood of the market.
The bottom line: the euro deal is in priority. JPY, AUD and gold also have quite interesting situations for trading.