Daily Technical Forex Forecast 02.05.2017

EUR/USD

The euro continues trading in the consolidation under the resistance level 1.0934 – 1.0943. Due to the holiday in many countries the market was “thin” on Monday, so any new volumetric levels or zones are impossible to highlight.

In such a situation, our previous scenario remains the same – long positions are in priority due to the strong uptrend. We can enter the market only after the confident breakout of the level 1.0934 – 1.0943 on increased volume with a further growth/fixation of the price above it. A stop lose should be places below the breakout volumetric bar. The first target – 1.1000, the second – 1.1050.

GBP/USD

The pound showed a smooth correction of the price on really small volume, so that we can’t point out new levels that can be used in trading this pair. Anyway, our previous scenario of opening long positions is still relevant.

We can open purchases after either after the creation of the new volumetric support level, or a beginning of the strong growth of the price (bullish impulse). In both cases a stop loss should be set below the level/bar. The target is 1.3000.

USD/JPY

USD/JPY broke out the level of resistance 111.56 – 111.70 on Monday, but this move was smooth and on small volume, so that we can’t open long positions from the current level. In such a situation we need to wait for a confirming signal – a price growth on increased volume – which insure us that the breakout was not fake. A stop loss should be placed below the level 111.42. A potential of the deal is around 120 pips.

USD/CAD

USD/CAD is trading in the consolidation below the level or resistance 1.3668 – 1.3690. Oil prices is going down, so the continuation of the growth of the pair is pretty possible. That’s why it is worth considering only long positions now. We can enter the market after the breakout of the resistance on large volume (to avoid fake breakout). A stop loss should be placed below the breakout volumetric bar. A potential of the deal is about 100 pips.

AUD/USD

The Australian dollar sharply grew up on Monday, but this move was on very small volume, so that further move of the price up is doubtful. Besides it we are unable highlight any new levels or zones which can be used in trading. In such a situation, it is better just to stay out of the market until the appearance of volume in the market.

XAU/USD

After another test of the resistance level, the price of gold sharply and on large volume rebounded and broke through the lower boundary of its consolidation. It is worth highlighting a new resistance level of 1266.80 – 1267.80, which was formed after the test. In this level, fairly large volume is concentrated. In addition, after the formation of this volume level, we saw a pin bar on H1 and the resumption of the fall.

Also it is necessary to note the new support 1254.90 – 1256.50, in which large volume is also concentrated. Nevertheless, after the formation of this level, the price has smoothly corrected and is trading near this level now. Thus, this support should be trade only for a breakdown, as there was no sharp reaction of the price (a strong rebound).

Given all the factors, it is worth considering extremely short positions for gold. There are 2 possible scenarios:

1. Smooth correction of the price, approximately, to the level of 1262.00. After a stoppage of the price, we can open sales with a stop loss set above the level 1266.80 – 1267.80. The goal is a local minimum (support). After its breakdown, we move a stop loss to the break even and continue to hold a deal until the reversal signal appears.
2. Confident breakdown of the level of support on increased volume with a fixation of the price below it. In this case, we also ca open short positions with a stop loss set just above the breakdown volumetric bar. The target is 1240.00.

The sentiment: the mood of the market confirms all our scenarios except gold. Anyway, all other factors tell us that this deal is really interesting, so I advise just to watch for a change of this indicator for gold and consider opening short positions.

The bottom line: USD/JPY and gold have the best situations for trading now. USD/CAD also a very interesting instrument, especially after the breakout of the resistance.