Despite the sharp price rebound from the resistance level 1.1264 – 1.1279, the pair EUR/USD could not continue its downward movement and grew up, completely absorbing the price fall. It is also worth noting that during the fall, volume was concentrated at the bottom of the movement, after which the price resumed growth.
After the next test, the pair continued trading under the resistance, which is the cornerstone of EUR/USD trading.
Thus, our previous scenario remains relevant, we can open long positions only after the breakdown of the level 1.1264 – 1.1279. The price movement should be sharp and on increased volume to avoid a false breakout. After a fixation of the price above this mark, we buy this instrument. A stop loss should be put under the volume breakdown bar or the beginning of the breakout movement. The growth potential is about 90-100 points.
The pound has finally broke out the resistance 1.2899 – 1.2913 and is trading above this mark. The move was sharp and supported by increased volume. After that the price tested the breakout point and rebounded up.
So the road to 1.3040 is open and we can open long positions. We can enter either from the current level, or after a small correction of the price to obtain the better entry point. A stop loss should be placed below the level 1.2896.
The yen showed an upward correction, but the growth was on medium volume, so our previous scenario of opening short positions remains actual. We can enter the market after a stoppage of the correction and the beginning of the fall on increased volume. A potential of the deal is around 90-100 pips.
After the sharp fall of the oil price, USD/CAD showed a strong growth on large volume. We need to highlight a creation of the new support level 1.3479 – 1.3498, which contain huge volume.
Given these facts we should consider long positions for this instrument, but the overall situation is too complicated as both currencies are weak now. Of course, if the price tests the support and rebounds back, we can enter the market with a stop loss set below the level. But potential of the growth is too small, only 50-60 pips.
So despite the scenario, we should be extremely careful trading USD/CAD.
It is necessary to point out the new resistance level for the Australian dollar – 0.7563, which is the local maximum as well.
Given the local uptrend and the abrupt growth of the price we should consider opening only long positions. We can enter the market after a confident breakout of the resistance. A stop loss should be placed below the level 0.7523. A potential of the growth is around 80 pips.
Gold corrected down and is trading in the consolidation between 2 levels: the support 1274.10 – 1277.00 and the resistance 1295.10. The correction of the price was on medium volume, so it does not cancel our previous scenario of opening long positions after the breakout of the resistance.
So we need to wait for the resumption of the growth of gold and the confident breakout of the level 1295.10 on increased volume. After that we can enter the market and open long position with a stop loss set below the breakout volume bar. A potential of the growth is around 140-150 pips.
The sentiment: today the mood of the market confirms all our scenarios which is a good sigh for active trading.
The bottom line: the euro and the pound are in focus today. The yen and gold are also interesting instrument if the market gives additional signals.