Due to the release of negative macroeconomic data for the US, the pair EUR/USD has grown rapidly and tested the global level of resistance. The move was on large volume, however, it is worth noting that it was concentrated in the upper part of the movement. A new resistance level of 1.1268 – 1.1279 was formed, which stopped further growth, and after the FOMC meeting, at which the interest rate was raised, the pair showed a abrupt fall on even larger volume.
In general, despite all the moves, the pair is still trading in the consolidation.
Nevertheless, we have a fresh and, most importantly, a strong level of resistance from which we can trade. Considering the strong fall, it is worth only selling. We can open long positions \\after a smooth correction of the price on small volume to about 1.1245 level. A stop loss should be set at the level of 1.1288, the target – 1.1168. The risk/profit ratio is 1 to 2.
The pound repeated the euro move and after a strong growth showed a stronger fall. We should highlight the new level of resistance 1.2801, which stopped the growth and from with the fall began. Also it is the higher boundary of the local consolidation for GBP/USD.
So the scenario for trading this instrument is the same as for the euro: after a smooth correction of the price we open short position with a stop loss set above the resistance. The target is 1.2650.
There is a new level of support for the yen that should be highlighted, it’s 109.16 – 109.37. This level was created after the FOMC meeting and the rate hike and contains really huge volume.
So if the price tests it and rebounds up on increased volume we can open a long position with a stop loss set below the level 108.92. The target is the level 110.80.
We need the additional signal (rebound) because the fall of the price after the bad data for the US ecomony was not absorbed.
After the FOMC meeting USD/CAD tested the level of resistance 1.3234 – 1.3246 and is still trading in it now. Also we need to highlight the strong fall of the oil price. Adding here a growth of the US dollar, we should consider opening long positions for this currency pair.
We can enter the market after a strong breakout of the resistance with further fixation of the price above. A stop loss should be placed below the level 1.3180. The target is 1.3460.
The Australian dollar is the only currency that grew up after the rate hike and is trading near its local maximum. Also we need to highlight the fresh resistance 0.7629, which contains large volume.
Given the strong uptrend and the growth of the price even despite the news, we should consider long positions after a confident breakout of the resistance. But I advise you to be extremely careful while trading AUD/USD, because the US dollar strengthened, so the possibility of the downward correction is pretty high.
Gold fell down sharply and on very large volume after the FOMC meeting and totally absorbed the previous growth. After that the price tested the support 1260.50 – 1262.20 and is trading a bit above this level now.
Besides we can highlight the new resistance 1278.80 that contains large volume, but it is doubtful that the price will return there.
Given such a strong fall we should consider only short positions for gold. We can enter the market after a confident breakdown of the support on increased volume. A stop loss should be placed above the volume breakout bar or the beginning of the breakout move. A potential of the fall is around 130-140 pips.
The sentiment: as can be seen from the diagram below, this indicator has not reacted on the changes on the market, so now we can’t rely on it and need to watch for further changes of the sentiment.
The bottom line: after the rate hike it seems as US dollar is gaining an advantage, so if we see the confirmation of it, we should buy the Greenback against other major currencies.