The Euro continued its upward movement and now the price is near the upper limit of the consolidation. It is worth noting that the growth was fairly confident and supported by pretty large volume, which is a strong bullish sign. Unfortunately, volume was spread throughout the movement, which makes it impossible to single out a specific new volume level.
Thus, the most likely scenario is a breakdown of the upper boundary of the local consolidation, which will be an excellent signal for entry, and further price growth.
The breakdown movement must be sharp and on large volume, this is a must condition in order to avoid false breakdown, which will make the entrance more accurate and reliable. A stop loss should be placed below a volume breakdown bar or the beginning of a rapid price growth. The potential of the deal is about 110 points.
The pound grew up and broke out the previous resistance level, after which increased volume appeared and the new resistance level 1.3211 – 1.3223 was created. This level contains quite large volume, so we can trade this currency pair only after a strong reaction of the price from this mark.
If the price tests it one more time and then falls down sharply and on large volume, we can consider short positions with a stop loss placed above the resistance and the target is the local minimum.
If the pair continues growing and breaks out the resistance confidently and on large volume, we can deliberate long positions. A stop loss should be placed below the breakout volume bar. A potential of the deal is 130-140 pips.
The price failed to breakdown the lower limit of the consolidation and returned trading back in it. That’s why our previous scenario remains the same: we might consider opening new deals only after a sure exit of the price from the range on large volume, so it will be a more accurate signal for entering the market.
While the pair is trading in the consolidation, it is better to stay out of the market.
The price fell down yesterday, but the move was on small volume, so we can’t consider it as a strong bearish signal and can’t point out any new volume level.
In general, USD/CAD is locked between two strong volume levels: the support 1.2404 – 1.2428 and the resistance 1.2566 – 1.2580. Both levels contain large volume, so that we can trade this currency pair only after a sharp and confident exit of the price from it.
While the pair is located in this consolidation, we should skip it from our trading plan.
The Australian dollar is still trading in the local consolidation a bit higher than a support level 0.7744, where large volume is concentrated. Also we need to point out the resistance 0.7868. So the pair is locked between these two levels and the best decision will be just to wait for the price to come out from this local range. Until that it is better to stay out of the market.
It is necessary to point out the new resistance level 1291.60 – 1294.20, which contains large volume that has stopped the growth of the price. Now gold is trading a little bit below this mark. Given the sure growth we should give preference to long positions, but only after a breakout of this fresh level.
The move should be sharp and supported by increased/large volume. A stop loss should be placed below the breakout volume bar. A potential of the deal is around 150 pips.
The sentiment: this indicator confirms our scenarios for the Euro and for the Pound. For gold it is equal. For all other currency pairs it does not matter as they are in consolidations.
The bottom line: we have a few interesting scenarios for trading, especially for EUR/USD, GBP/USD and XAU/USD. For other currency pairs we should wait for the exit of the price from ranges.