The Euro could not continue falling and after a creating of the large pin bar grew up. At the moment the pair is testing the resistance level 1.1910 – 1.1918, where increased volume is concentrated. We should not that volume on the market is still low.
That’s why we should trade this currency pair only after a strong reaction of the price from the resistance level. A price move should be sharp and on large volume, only this will enable us to enter the market. If the price still continues trading in the consolidation or moves on small volume, it is better to stay out of the market.
After the release of the fundamental news, the pound sterling demonstrated a significant price growth and broke out the previous local maximum. It is also worth noting that the price growth was supported by very large volume, which is an excellent signal for the continuation of the uptrend for this currency pair. In addition, we should point out the new volume support level 1.3320 – 1.3342.
Given all of the above factors, we should consider exceptionally long positions for the pound. We can open purchases after a slight smooth correction of the price to the level of support in order to get a more advantageous entry point. A stop loss should be placed at the level 1.3302. The growth potential is about 120 points.
After the test of the level of resistance 110.92 the price fell down sharply and on large volume. On the Asian session the Yen grew up and reestablish some of the losses, but is still trading in the consolidation.
So we should trade this currency pair only after a sure exit of the price from the range. Of course, given that the price is trading near the resistance we can consider a scenario of its breakout. If the price continues growing and breaks out the level 110.92 on large volume and shows further upward move, we will be able to enter the market and open long positions. A stop loss should be placed below the breakout volume bar. A potential of the deal is 120 pips.
Nothing has changed for the Canadian dollar as the price is still trading in the local consolidation, where large volume is concentrated. Given the presence of the global downtrend short positions still should be in priority.
We can enter the market after a strong bearish momentum on large volume. A stop loss should be placed above the upper limit of the range. A potential of the deal is more than 100 pips.
The pair is trading in the local consolidation a little bit above the fresh level of support 0.7970, where increased volume is concentrated and which stopped the fall of the price. So that we can trade this instrument only after a sharp reaction on this level. The move of the price should abrupt and supported by large volume.
If the price continues trading on small volume, it is better to stay out of the market.
Gold showed a strong growth on really large volume yesterday, which is a good signal for the ending of the downward correction and a resumption of the uptrend. Volume was spread throughout the move, so we are unable to point out any specific level, anyway, such a strong movement is a great bullish signal.
Given all these factors we should consider opening long positions. We can enter the market after a little downward correction in order to obtain a better entry point. A stop loss should be placed below the level 1315.40. The target is 1347.00.
The sentiment: this indicator confirms all our scenarios, which is a good confirming signal for us. As for the Euro and the Australian dollar, this indicator is equal, so we should get additional signs to be able to trade them.
The bottom line: after an appearance of large volume on the market the situation became more interesting and now we have a couple of good scenarios for trading, especially GBP/USD and XAU/USD.