Due to the day off in key countries, Monday was a fairly sluggish day with low liquidity, but on Tuesday, volumes appeared on the market and the pair EUR/USD continued its growth. It is worth noting that despite the fact that the upward movement was on quite large volume, it is not possible to point out new levels, since the volume is spread throughout the schedule.
Nevertheless, the price growth after the appearance of volumes on the market is a good sign for potential purchases.
Also, the resistance level 1.1231 – 1.1243 remains actual, also it is still a local maximum.
Purchases can not be opened from the current level , because there is no good place for a stop loss + growth potential is severely limited.
Thus, our scenario for trading the euro is as follows: we are waiting for further growth and a breakdown of the resistance level, and this movement must be sharp and supported by large volume. After a fixation of the price above the level, we open long positions. A stop loss should be set under the breakdown volumetric bar. The potential of the deal is about 80-90 points.
After the confident growth of the price from the support level 1.2783 – 1.2792, the pair showed a strong bearish momentum (futures expiration) and is testing this level once again. The fall was almost without volume, but it is still a good sign for opening sales, especially after a breakdown of the support.
So the scenario remains the same: after the strong and confident breakdown of the resistance we open short positions for the pound with a stop loss set above the breakout volume bar. A potential of the deal is around 100 pips.
The yen is still trading in the consolidation near its lower boundary. So our previous scenario remains the same: after a strong bearish momentum and an exit of the price from the range we open short positions. A stop loss should be placed above the breakout volume bar. A potential of the fall is around 110-120 pips.
The pair is trading in the consolidation, so until its breakout we should stay out of the market. Of course, given the downtrend, we should consider short positions as a priority scenario.
We can enter the market after a strong bearish momentum and the breakout of the lower boundary of the range. A stop loss should be placed above the beginning of the fall. A potential of the fall is around 100 pips.
For the Australian dollar everything remains the same: the pair is trading in the consolidation without volume, so there is no good situation for trading right now. We need to wait for the beginning of the local trend to be able to trade this instrument.
Gold fell down on Tuesday, but the fall was smooth, so we can’t consider it as a reversal signal. Also we need to highlight the new local level of resistance 1264.40 which contains really large volume. A presence of the uptrend is also very important for trading this instrument.
So we can resume opening long positions only after a breakout of the new resistance on increased volume. A stop loss should be placed below the level 1259.00. A potential of the growth is around 150 pips.
The sentiment: the market is indefinite now as many instruments have balanced sentiment. Only the euro and the yen deals are confirmed. The pound still shows an advantage of long positions, but all technical factors tell the opposite story.
The bottom line: the euro and the yen are in priority today. The pound and gold can be traded only after breakouts of important levels.