After the strong growth of the price on Monday, the Euro fell down and totally absorbed the upward move. So overall, the situation remained the same – the pair is trading in the global consolidation. Volume on the market is very low, so we can’t point out any new volume levels or zones.
So that our scenario remains the same too – wait for the confident breakout of the boundaries of the consolidation and only then we can consider opening any deals. Until that it is advisable to stay out of the market.
GBP/USD at last has broken down the support level of 1.2846 and fell below this level. It is also worth noting that the breakout movement was quite sharp, but, unfortunately, on small volume. Thus, now it is not worthwhile to trade this movement, because there is a high possibility of a false breakdown.
Nevertheless, the exit of the price from the consolidation down makes the further fall the most likely option, especially as there is a downtrend on the pound.
Therefore, sales should be in priority. We can open short positions after the resumption of the price fall on increased volume, which will be a more accurate and strong bearish signal. A stop loss is worth a little above the level of 1.2853. The potential of the deal is about 100-110 points.
The price continued growing and and is trading near the middle of the range between two strong volume levels: the resistance 110.92 and the support 108.63 – 108.71. It should be noted that the upward move was on small volume, so we can’t highlight any new volume levels or zones.
So that the best scenario will be waiting for the breakout of the boundaries of the consolidation which will be a great signal for trading. After that we can trade this currency pair. A breakout move should be sharp and on increased volume, it is must conditions.
Despite the strong fall of the price, the pair failed to continue downward movement and rebounded up. Also we need to point out the new level of support 1.2530 which was created during the fall. This level contains large volume, so we can resume short positions only after the strong breakdown of this level. The move should be sharp and supported by increased volume. A stop loss should be placed above the breakdown bar. A potential of the deal is around 100 pips.
The Australian dollar fell down sharply, but the move was on low volume, so it should not be considered as a strong bearish signal. Overall, the pair is trading in the local consolidation near the support level 0.7880 now.
Exactly from this level we can deliberate positions for this currency pair. Given the presence of strong global uptrend, we should give preference to long positions. If the price rebounds from it rapidly and on large volume, we can consider long positions. A stop loss should be placed below the support level with a little margin. A potential of the deal is around 60-70 pips.
The situation for gold is tough as the price is trading in the consolidation between two strong volume levels: the resistance 1296.30 – 1300.50 and the support 1267.70 – 1269.90. The pair is in the middle of this range, so it is difficult to predict further move.
That’s why the best decision will be stay out of the market until the confident breakout of the boundaries of the consolidation. The breakout move should be supported by large volume and be sharp.
The sentiment: the mood of the market confirms our deals for the pound and Canadian/Australian dollars. For all other instruments situations are difficult because they are trading in ranges.
The bottom line: the whole situation on the market is tough for trading as many pairs are in consolidations or there is no good places for stop losses. So I advise you to be extremely careful.