After trading in the consolidation for few weeks, EUR/USD, at last, fell down strongly and broke down the lower boundary of the range 1.1140. The breakout move was supported by pretty large volume and BID deltas, which means that bears were dominating the market at that moment. Also we need to highlight the new volume resistance level 1.1154 – 1.1160.
So now we have a good situation for opening short positions for the euro. We can enter the market either now, or after the stoppage of the correction and the resumption of the fall. A stop loss should be placed above the level 1.1166. A potential of the fall is around 80-90 pips.
On Tuesday, the pound fell sharply by more than 100 points and, as a result, broke through the lower limit of the consolidation and is trading below it now. It is worth noting that the breakdown movement, as well as the whole fall of the price, was on increased volume, which is an excellent signal for further continuation of the move.
It is also necessary to allocate the new volume level 1.2624 – 1.2631, in which large volume is concentrated. This is the level where the price was fixed after the breakdown and is trading near it until now.
Given such a strong downward movement and the exit of the price from the consolidation, it is worth considering only sales of the pair GBP/USD.
We can open short positions after the resumption of the fall from the level of 1.2624 – 1.2631 on increased volume. A stop loss should be placed slightly above the level 1.2658 (breakdown volume bar). The potential of the fall is about 120-130 points.
Despite the correction of the price down, our previous scenario for the yen remains the same – long positions are in priority now.
The downward move on Tuesday was smooth, but on increased volume, so we can resume opening long positions after the continuation of the local uptrend that will be supported by increased volume too. A stop loss should be placed 110.65. The target is 112.00.
The situation for USD/CAD is very complicated. The pair is trading in the consolidation above the resistance level 1.3167 – 1.3191. On the one hand, we can sell this instrument if it breaks down this level, on the other hand, the US dollar is strengthening, so the possibility of such a scenario isn’t too high. If we talk about long positions, they are also very doubtful, because there is a strong downtrend.
Given all these fact it’s better to stay out of the market for this currency pair.
The same situation is for the Australian dollar. The price has broken down the lower boundary of the consolidation, but we have a strong uptrend. The move was pretty abrupt, but was not supported by large volume, so we are unable to point out any new levels or zones.
In such case it’s also better to stay out of the market and wait for the appearance of large volume on the market.
Our previous scenario for gold remains the same: we should search for the entry point for short position. After the fall of the price on increased volume yesterday, the instrument shows a smooth correction without volume.
Also we need to point out the presence of the strong accumulation of volume at the top of the chart, which is a good place for a stop loss.
We can enter the market after the continuation of the current correction in order to obtain an acceptable entry point. A stop loss should be set above the level 1256.50. A potential of the deal is around 110-120 pips.
The sentiment: our deals for the pound and yen are confirmed. The mood of the market for the euro still shows us that long positions should be in priority, but given all technical factors, we should sell it. For gold the situation is near 50/50, so we just need to watch for further changes.
The bottom line: the best scenarios for trading are for the pound and gold. The yen and the euro are also quite interesting. USD/CAD and AUD/USD are better to be skipped today.