On Tuesday, EUR/USD showed a mad growth on very large volume and, as a result, broke through the upper boundary of the consolidation/global resistance and continued its growth. The upward movement was very sharp, and the price was confidently fixed above the range, which is an excellent signal for the continuation of the growth of this instrument.
Also it is worth noting a new level of support 1.1284 – 1.1290, in which fairly large volume is concentrated, that was tested, after which the price resumed its rapid growth.
Given all of the above factors, it is necessary to consider exceptionally long positions now. However, we can’t open purchases from the current level, since the stop loss will be quite significant + very often after such movements a correction follows.
Therefore, we need to wait for a smooth correction of the price down and after the resumption of the price growth, it is possible to open long positions. A stop loss should be placed below the level 1.1272. The growth potential is about 100 points.
The pound also grew up and broken out the upper boundary of the consolidation. The move was supported by increased volume, but not large. Also the price formed a pin bar and the resistance level 1.2829 at the top of the movement. So we should be careful trading this pair.
Anyway, the growth was pretty sharp, so we should consider opening purchases here.
We can enter the market only after the confident breakout of the resistance 1.2829 on increased volume. A stop loss should be placed below the breakout volume bar. A potential of the deal is around 110-120 pips.
The yen continued growing and is trading near the local maximum now. Also we need to highlight the new level of support 111.49 – 111.57 which contains pretty large volume that stopped the downward correction of the price.
Given all these factors we should regard long positions as a main scenario, but due to the whole situation on the market and the fall of the US dollar against majors, I advise you to be very careful.
We can enter the market after a smooth correction of the price (to get a good entry point) and the resumption of the growth on increased volume. A stop loss should be placed below the level 111.49. A potential of the growth is around 120 pips.
USD/CAD has broken down the support 1.3167 – 1.3191 and the price was fixed below it. Unfortunately, despite the rapidness of the move, the breakdown was on small volume, so we can’t trade this movement now.
Anyway, it is a good sign for the price to continue falling and we enter the market after the confirming signal. Such a signal is a strong fall of the pair on increased volume. A stop loss should be placed above the level 1.3203. A potential of the deal is, at least, 100 pips.
The Australian dollar continued trading in the consolidation, but showed a pretty abrupt growth. Together with the fall of the US dollar it is a good sign for the potential breakout of the resistance 0.7629.
If the price breaks out this level on increased volume and continue growing (or will be fixed above it), we can open long positions with a stop loss placed below the breakout volume bar. A potential of the growth is 90 pips.
After a strong fall of the price, gold could not continue this move and is locked in the consolidation between two levels no. They are: the resistance 1258.00 and the support 1240.80 – 1242.20.
Both levels contain increased volume and were tested few times.
So we can trade this instrument only after the breakout of the boundaries of the consolidation. Given the weakening of the US dollar, I prefer considering the scenario of the further growth and the breakout of the level 1258.00.
If such a move is supported by large volume, we can open long positions with a stop loss placed just below the breakout volume bar. The target – 1278.00.
The sentiment: all our scenarios are confirmed by the mood of the market, so it is a good sign for active trading today.
The bottom line: after the appearance of large volume on the market we have few good scenarios for trading, especially for the euro, the pound and gold. Be very careful with the yen.