Following Donald Trump’s statement that the dollar is now too strong, the EUR/USD pair has risen by more than 80 points and is trading near resistance level 1.0681 now. It is also worth noting the new level of support – 1.0636 – 1.0644, which was formed during the price growth after the publication of the US president’s statement. We need to point out that this move was on very large volume and broke the previous resistance level, canceling our scenario for opening short positions for this instrument.
Given the general weakening of the US dollar and the rapid growth of the EUR/USD pair, I would recommend to look closely at purchases of this asset, but only after the breakdown of the level of 1.0681 and the fixation of the price above the previous consolidation. The breakdown should be on increased volume; a stop loss should be placed under the support level 1.0636 – 1.0644. The first target is 1.0771, the second is 1.0880. Upon reaching of the first goal, it is desirable to move the stop loss in the breakeven.
Despite the prompt growth of the price, the pound is still trading inside its consolidation. Unfortunately, there is no opportunity to highlight any new volumetric level, because volume is spread across the chart. Besides it there is the resistance – the local maximum. Overall situation is pretty difficult for trading, so I advise to skip this instrument from today’s trading plan.
If you still want to trade this instrument, you should open only long positions.
Our previous scenario for the yen was totally confirmed: the price has fallen down and now is trading too far away from the level of resistance. That’s why we can’t open short positions from the current level – a stop loss will be too big. We need to wait for a smooth correction of the price and then enter the market. A stop loss should be placed above the level 109.88. A potential of the deal is around 120 pips.
USD/CAD fell down and broke down its consolidation which is a good signal for opening short positions. But the oil price also began falling, so now the situation is a bit weird: weak US dollar and weakening Canadian dollar. I don’t like to trade such currencies, so my advice is to stay out of the market. Besides it, other majors have more attractive situations for trading.
Of course, if your trading system shows you entry points, you can trade this instrument, but you should consider opening short positions and watch for the price of oil.
The market showed us a strong reversal signal for AUD/USD – rapid growth of the price on large volume and a breakout of the resistance. So we should consider only long positions now. The level 0.7530 – 0.7538 is still actual, but as a support where the price had been fixed after the strong growth and then continued its way up.
We can enter the market only after a smooth correction, because if we open long positions now, we will get a too big stop loss, which should be placed below the support. The target is 0.7670.
Gold also showed a strong growth after the release of the Donald Trump’s statement. This move was on pretty large volume, which makes the scenario of further rising of the price the most possible script. The support level 1265.70 – 1267.90 is still actual, but as an indicative level of the power of buyers – its breakdown will be a reversal signal. Until that we should consider only long positions.
We can enter the market only after a smooth correction of the price on small volume, because now the price is too far away and our stop loss will be too big. After the correction we open long positions with a stop loss below the level 1271.50. A potential of the deal is around 150 pips.
The sentiment: from the chart below we can see that the sentiment for the euro and AUD begins to change. The mood of the market for the yen and gold confirms our scenarios.
The bottom line: the euro and the Australian dollar have good situations for trading. The yen and gold are also interesting, but only in case of corrections.