Despite the strong price fall last week, EUR/USD could not continue the downward movement and corrected upwards. It is worth noting that the price growth was on small amount, so it is impossible to single out a specific level. Moreover, the pair is trading in the consolidation, so the best scenario will be to wait for a sure exit of the price from the range and only after that we can consider new deals for the Euro.
While the price is inside this flat, it’s better to be out of the market.
The pound continues trading in the consolidation near the local maximum. It is worth noting that very large volume is concentrated in this range, therefore it is possible to trade GBP/USD only after the breakout of one of the boundaries of the consolidation. The breakout movement must be sharp and on large volume to avoid false breakout.
While the pair is trading in this range, it is better to stay out of the market.
After a significant price increase on Wednesday, after the FOMC press conference, USD/JPY corrected downward. The downward movement was rather sharp, but on small volume, so we can not regard it as a reversal of the local uptrend. Also it is worth noting the fairly large accumulation of volume at the local maximum.
Thus, we can open long positions only after the breakdown of the local maximum, with the movement must be sharp and on increased volume. A stop loss should be placed under the volume breakout bar. The potential of the deal is about 120 points.
For this currency pair, it is worth highlighting the key level – resistance 1.2345 – 1.2368, in which large volume is concentrated, which stopped the price growth. Also it is worth noting that on Friday the price tested this mark and remained trading just below it.
Therefore, we are able to open long positions only after the breakdown of this resistance. The breakout movement should be on high volume and sharp – this will be a more accurate signal for entering the market. A stop loss should be placed under the breakout volume bar. The potential of the deal is 100-110 points.
For the Australian dollar we should note the strong support level of 0.7923 – 0.7939, in which large volume is concentrated, after which the price grew sharply.
Thus, we can open short positions only after a sure breakdown of this mark on increased volume. A stop loss should be placed just above the breakdown volume bar. The potential of the fall is up to 90 points.
Gold is trading in the consolidation between two volume levels: the resistance 1300.80 – 1303.40 and the support 1288.50. In this range, fairly large volume is concentrated, so the best solution is to wait for the price to come out of the consolidation and only then consider the possibility of opening new deals. Movement should be sharp and on large volume.
If the price continues trading within this consolidation, it’s worth to be out of the market.
This week there is no point in considering the sentiment of the market, since almost all instruments are in consolidations.
The bottom line: the situation of the market is pretty tough as almost all instrument are in consolidations or need additional signals like a breakout of a volume level. That’s why we should be careful and wait for good confirming signals.