On Wednesday the euro fell down and broke the level of support, but this move was smooth and on medium volume. So that it should not be considered as a reversal signal, moreover the price showed the growth at the end of the day.
Given all these facts, I still prefer to regard long positions as a prior scenario. We can enter the market after the strong bullish momentum, which will mean that a correction was just a technical move. A stop loss should be set below the local minimum 1.0850. The target is 1.1000.
The pound has broken out the upper boundary of the consolidation, but this move was on Asian session and on small volume. So it is dangerous to enter the market now. But anyway, it is a good signal that tells us that the price is willing to go up further.
Our yesterday’s scenario remains the same: after a strong bullish momentum we open long positions. A stop loss should be placed below the impulse. The target – 1.3000.
The yen fell down sharply and on large volume on the American session on Wednesday. The level of support 110.64 – 110.75 is still relevant, but as an indicator of long positions. If the price breaks it down, our scenario of opening long positions will not be actual any more.
But before this, we can consider opening purchases after the breakout of the local maximum on increased volume. A stop loss should be placed below the breakout bar. A potential of the deal is around 90-100 pips.
After the test of the level of resistance 1.3601 – 1.3610 the price went down sharply. This move contains large volume as for the Asian session. But I do not advise to sell USD/CAD, because of the strong uptrend.
It’s better to stay out of the market until the breakout of the resistance on large volume.
The Australian dollar broke down the level of support and in the same time the local minimum, but the price failed to fix below it. This movement was on large volume, but it was spread across the breakdown move. Anyway, this is a good signal that the pair will go down further. We can enter the market after the resuming of the fall, especially if it is on increased volume. A stop loss should be set a bit above the local maximum. A potential of the fall is around 80-90 pips.
After the fall on fairly large volume, the price corrected to its fresh resistance level 1266.20 – 1269.00 and is trading near this mark now. Large volume was concentrated in this level during the fall of the price. In addition, this level is the previous local minimum, which only strengthens its value.
It is worth noting that the test of the level was on medium volume after which the price just smoothly corrected, and not rebounded sharply from the resistance. Thus, it is impossible to open sales from the current price. It is necessary to wait either the fall the price below the local minimum 1263.60, or a strong bearish impulse from the level 1266.20 – 1269.00. Both situations will be excellent signals for opening shorts. A stop loss should be placed a little above the resistance level. The potential of the deal is approximately 150 points.
The sentiment: all our scenarios are confirmed by the mood of the market, only gold has a bit complicated situation. But, as I said before, we need to watch for the change of this indicator in case of the continuation of the fall of gold.
The bottom line: the best deal for today is the purchase of GBP/USD. Also watch for the euro and gold.