Weekly Technical Forex Forecast 22-26.05.2017


EUR/USD

The uptrend for the euro continued and the price created a new volumetric level of support that should be highlighted – 1.1188. It contains large volume that pushed the price higher.

Also we need to point out that the correction of the price was totally absorbed, which means that bulls are dominating the market right now.

volume euro

Given all the facts above, we should consider only long positions for the euro now. Nevertheless, after such a strong growth the price very often starts correcting down. So we need to get a confirming signals to be able to enter the market.

The best scenario will be a test of the support 1.1188 and a rebound of the price from it on increased volume. It will tell us that big players want to push the euro even higher. A stop loss should be placed below the level 1.1177, that wa a beginning of the strong growth. A potential of the deal is around 80 pips.

buy euro

GBP/USD

The pound is still trading in the consolidation, but the price is testing its higher boundary now. We need to point out this level, it’s 1.3040. Also large volume is concentrated in this level, that stopped the previous attempt of the price to grow.

Besides it we need to note that the strong fall of the price on Thursday was totally absorbed, it means that bears do not have enough power to push the price down. This makes long positions a more priority scenario.

volume gbp

We can enter the market only after the breakout of the 1.3040 on large volume with further fixation of the price above this mark. It will save us from fake move.

A stop loss should be placed below the breakout volumetric bar. A potential of the deal is around 120 pips.

If the price continues trading inside the consolidation, we just should stay out of the market.

buy gbp

USD/JPY

The yen fell down strongly last week and created a new resistance level 111.70 – 111.90, which contains pretty high volume. The price failed to continue downward move and is trading in the consolidation below the resistance.

Also we need to highlight that there is a large accumulation of volume inside the range.

volume jpy

Unfortunately, there is no a good situation for trading this pair, but given the local downtrend and a presence of the strong resistance we should consider short positions.

We can enter the market after a confirming bearish signal. The best scenario will be a test of the resistance and a strong fall of the price from it. The move should be on large volume, which will be a sign that bears are still have power to push USD/JPY down.

A stop loss should be placed above the level 111.90. A potential of the deal is around 120-130 pips.

sell jpy

USD/CAD

The Canadian dollar broke through the support/local minimum and continued its downward movement.

It should be noted that there is a large accumulation of volume at the top of the chart, from which the price went down, which is an indicator of the strength of bears. Now this accumulation acts as a resistance.

In addition, the growth of the price of oil also supports the Canadian currency, which is negatively reflected on the pair USD/CAD.

volume cad

Given that all factors indicate a continuation of the downtrend, it is worth giving preference to short positions. It is advisable to enter the market after a small correction of the price upwards, in order to obtain a more advantageous entry point and, as a consequence, a better risk/profit ratio.

A stop loss should be placed above 1.3600, from which the breakout price movement began.

The potential of the deal is more than 100 points.

sell cad

AUD/USD

The Australian dollar is trading in a smoothly rising consolidation. It is also worth noting that the sharp fall of the price was completely blocked, which means the domination of bulls on the market.

In addition, the price growth was accompanied by large volume.

volume aud

Thus, long positions should be considered as a priority scenario. Purchases must be opened after the breakdown of the local maximum, preferably on high volume. A stop loss should be placed just below the beginning of the breakout movement. The potential of the deal is about 70-80 points.

buy aud

XAU/USD

After a strong growth of the price gold showed a sharp correction of large volume. The new resistance was created during the fall – 1257.00 – 1260.20. The price is trading below this level at the moment.

Also we need to highlight that the uptrend for gold is still actual, so it makes long positions a priority scenario, but only after the breakout of the resistance.

volume gold

So we can enter the market and open purchases after a confident and sharp breakout of the level 1257.00 – 1260.20 on large volume. In such case it will be a great bullish signal + we will be protected from the fake movement.

A stop loss should be placed below the breakout volumetric bar. A potential of the deal is around 150 pips, so a risk/profit ratio for this deal will be, at least, 1 to 2.

buy gold

The sentiment: mood of the market confirms our deals for EUR/USD, GBP/USD and USD/JPY. Gold and AUD/USD have a bit complicated situation, because the indicator is 50/50 for both instruments. Anyway, if we get a confirming signals, we can trade them. USD/CAD deal is under the question, because the sentiment shows totally opposite situation.

sentiment

The bottom line: the most interesting instrument for trading are the euro, the pound and gold. The yen and the Australian dollar can be traded after an appearance of confirming signals.