EUR/USD continued its local fall, but the price move was again stopped by large volume, after which a new support level of 1.1386 was formed. This level is also interesting as it is the lower limit of the previous accumulation and contains large volume.
It should be noted that the price rebounded from this mark on increased volume, which only strengthens the value of this level. It is also necessary to note the resistance level 1.1470, from which the sharp fall began and which also contains fairly large volume.
Thus, now the price is closed in the consolidation between these two levels.
Given the current situation, it is worth highlighting 2 possible scenarios for trading the euro:
1. The breakdown of the support on increased level and the continuation of a fall of the price. This will be an excellent signal for sales. A stop loss should be placed just above the breakdown volume bar. The potential of the deal is about 70-80 points.
2. A resumption of the price growth from the current level on large volume. In this case, we can open long positions. A stop loss should be placed below the support level with a small margin. The first target is 1.1470, the second is 1.1520.
Longs should also be considered in case of a smooth price growth and a breakout of the resistance.
The pound grew up and broke out the level of resistance, which is a good sign for opening long positions. The upward move of the price was on quite small volume, so we can’t highlight nay new level or zones + we need to wait for the strong bullish impulse to be sure that the price won’t return trading in the consolidation.
The best scenario will be a smooth correction of the price down and then a strong bullish momentum on increased volume. After such a signal we open long positions with a stop loss placed below the level 1.2900. The target is 1.3020.
The Yen stopped falling and is trading in the consolidation now. Unfortunately, volume on the market was small yesterday, so we can’t point out any new level or zones. To be able to trade USD/JPY we need to see a creation of new volume level(-s) and a strong momentum. Until that there is no a good situation for trading this currency pair.
After the strong fall of the price, USD/CAD is trading in a local consolidation. Also we need to highlight the strong volume resistance level 1.2813 – 1.2830, which is still actual.
Overall, our previous scenario remains the same: after a smooth correction of the price we open short positions. A stop loss should be placed above the resistance. A potential of the fall is more than 100 pips.
The Australian dollar continued growing on increased volume, so the global uptrend is going on and we should consider only long positions now. Besides it we need to point out the level of support 0.7717 – 0.7728, which contains pretty large volume.
We can enter the market after a resumption of the growth on increased volume either after a smooth correction to the support or from the current level. A stop loss should be placed below the level 0.7712. A potential of the deal is around 50-60 pips.
Gold could not breakout the resistance 1224.00 and fell down from it. The fall of the price was on average volume and smooth, that’s why we can’t trade this move.
Overall the price is trading in the consolidation, where large volume is concentrated.
So until the price breaks out the boundaries of the range we should better stay out of the market for gold.
The sentiment: the mood of the market confirms our scenarios for the pound, Canadian and Australian dollars. For the euro is points that long positions should be in priority.
The bottom line: GBP/USD, USD/CAD and AUD/USD are in priority today. Be careful with the euro. USD/JPY and gold should be skipped from trading plan today.