EUR/USD continues trading in the local consolidation under the resistance level 1.1217 – 1.1231. It is worth noting that large volume is concentrated in this range, so the exit of the price from it will mean the beginning of a new local trend.
It should also be noted that there is very low liquidity on the market for the last two days , so it is impossible to point out some new volume levels or zones.
Given the presence of a strong volume resistance level, the scenario of opening short positions seems most likely. We can open shorts only be after a strong bearish momentum on very large volume. This movement can be considered after either the test of the level 1.1217 – 1.1231, or a fall from the current level. A stop loss should be set above the level 1.1231 with a small margin. The main goal is 1.1120.
After the breakdown of the support the pound failed to continue falling and showed a pretty rapid correction up. The growth of the instrument was on small volume, so we can’t both consider it as a reversal signal and highlight any new volume level or zone.
Overall, the price is locked in the local consolidation and there is no good scenario for trading the pound now, especially before the FOMC meeting. So I advise to stay out of the market for this pair.
The situation for the yen remains the same – the pair is trading in the consolidation, so we can enter the market only after the exit of the price from it.
The breakout should be on increased volume and abrupt. Stop losses should be placed below/above volume breakout bars. The target for purchases is 112.00, a potential of the fall is around 100 pips.
USD/CAD continued falling down on increased volume, so our previous scenario remains the same – short positions are in priority now. Also we need to highlight the new volume resistance level 1.3234 – 1.3246.
We can enter the market after the resumption of the fall either from the current level or after the test of the fresh resistance. A stop loss should be placed above the level 1.3246 with a little margin. A potential of the fall is more than 100 pips.
The Australian dollar is still trading in the consolidation below the resistance level 0.7563, which means that our previous scenario remains the same – open long positions after the confident and sharp breakout of the level. A stop loss should be placed below the breakout volume bar. A potential of the deal is around 60 pips.
Gold broke down the support but failed to continue falling and after a creation of the new level of support 1260.50 – 1262.20, the instrument rebounded back. This level contains very large volume, so it’s pretty important.
Nevertheless, we can’t open long positions from it, because there is a strong local downtrend for gold.
So we should trade its breakout instead of the rebound. A breakout move should be sharp and on increased volume. A stop loss should be placed above the breakout volume bar. The target is 1250.00.
If the price continues trading above the support, it’s better to stay out of the market today.
The sentiment: this indicator shows that for the euro, the pound, the Australian dollar and gold long positions should be in priority, in meantime, for USD/CAD – short positions. For the yen a situation is almost 50/50.
The bottom line: today is a crucial day for the US dollar as FOMC will decide the destiny of the rate. That’s why I advise you to be very careful trading pairs with the USD. It will be a good decision to close all positions for such instrument before the event.