After the test of the resistance level 1.1217 – 1.1231, the euro rebounded down and is trading below this mark now. The move was smooth and without volume, so we are still unable to open short positions here, because the possibility of the upward correction is pretty high.
That’s why we need to wait for an appearance of large volume on the market and the continuation of the fall supported by it. A stop loss should be placed above the level 1.1231 as it was tested. A potential of the deal is around 70-80 pips, so the risk/profit ratio will be, at least, 1 to 2.
The pound had broken down the support level and continued its falling. Unfortunately, the move was on small volume so it is not the best time to enter the market. We need to see a continuation of the bearish momentum on increased volume to be sure that the breakout was not fake. Also we do not have a good place for a stop loss right now.
So we need to wait for the strong bearish impulse on increased volume to be able to open short positions for the pound. A stop loss should be placed above either the daily maximum or the beginning of the volume fall. A potential of the fall is around 150 pips.
The yen rebounded from the level of resistance 110.65 – 110.80 and is trading in the consolidation right now. The fall of the price was on small volume so we can’t regard this as a signal for the continuation of the downtrend.
The scenario of trading the yen is pretty simple: we need to wait for the exit of the price from the range. The breakout should be on increased volume. Stop losses should be placed above/below breakout volume bars. The target for purchases is 112.00. A potential of the fall is around 80-90 pips.
USD/CAD showed a strong fall of the price on very large volume. Also we need to highlight the new level of resistance 1.3322 – 1.3348 which contains really large volume.
Given such a bearish momentum we should consider opening only short positions. We can enter the market after a correction of the price to the resistance and the continuation of the fall.
A stop loss should be placed above the level 1.3348 with a little margin. The target is – 1.3225.
The situation for the Australian dollar remains the same as the pair is trading in the consolidation below the resistance level 0.7563. Now the price is testing this level and if it breaks it out on increased volume we can enter the market and open long positions. A stop loss should be placed below the breakout volume bar. A potential of the growth is around 60 pips.
After a sharp drop in prices last week, gold is now traded in a small local consolidation at exactly the level supported by 1265.20 – 1267.70. In this level, a large volume, both vertical and horizontal, is concentrated.
Thus, the breakdown of this mark will be an excellent signal for the continuation of the local downtrend.
The breakout movement must be sharp and accompanied by an increased volume with further fixation of the price below it. The latter condition is very important, in order to avoid false breakdown and return of the price to consolidation or its correction.
Stop loss should be set either for the level of 1270.50, or for the daily high, if it is above this level.
The main goal is the level of 1250.00, i.е. Potential drop of about 130-140 points. Risk / profit ratio, minimum, 1 to 2.
The sentiment: the sentiment for the euro and gold has not reacted to the changes on the market and still shows the priority of long positions for these instruments. But all technical factors tell about contrary situation. Scenarios for GBP/USD, USD/CAD and AUD/USD are confirmed.
The bottom line: today main focus is on the euro, pound and gold. Also waiting for the yen to breakout its consolidation.