After significant fundamental factors (the ECB meeting, the decision on the interest rate), EUR/USD demonstrated a strong fall of the price. The downward movement was sharp and on very large volume. As a result, the price broke through the lower boundary of the consolidation and continued its falling.
Also it is necessary to allocate 2 new levels of resistance. The first – 1.1692 – 1.1705, the second – 1.1740 – 1.1760. In both levels, large volume is concentrated.
Considering all the above factors, now it is worth considering exceptionally short positions for this currency pair. Sales can be opened after a smooth correction of the price up on small volume. A stop loss should be placed a little above the resistance level 1.1692 – 1.1705. A potential of the fall is 150-160 points.
If the price breaks through this resistance level, our scenario still remains relevant, but it is applicable to the second resistance.
The price fell down strongly yesterday and totally absorbed the previous growth of the pair. In general, GBP/USD remains trading in the consolidation between two strong levels: the support 1.3049 and the resistance 1.3318.
So that the best decision will be just to wait for the price to come out from the range and only after that we should consider new deals for this currency pair. While the price is still locked in the consolidation, we should stay out of the market.
USD/JPY grew up and is testing the resistance level 114.20 at the moment. If the price breaks it out, it will be a great bullish signal. The breakout 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 more than 110 points.
The pair continued growing, which totally matches with our previous scenario. Now we should consider only long positions for USD/CAD. We can enter the market only in case of a smooth downward correction on small volume, because we need to obtain an acceptable entry point. A stop loss should be place below the support 1.2764 – 1.2777. A potential of the deal is more than 100 pips.
Downtrend for this currency pair continues as the price fell down sharply on increased volume. Unfortunately, it was spread throughout the chart, so we can’t point out any concrete volume level. Anyway, now we should consider only short positions. We can enter the market after a smooth upward correction on small volume. A stop loss should be place at the level 0.7720. A potential of the fall is 80 pips.
Gold finally broke down the support and after that continued falling. Also we need to highlight the new resistance level 1273.80 – 1276.20, where large volume is concentrated.
Given all these factors we should give preference to short positions. We can enter the market after a smooth correction up to the resistance in order to get a better price for entering. A stop loss should be placed above the resistance level. A potential of the fall is 120-130 pips.
The sentiment: this indicator confirms all our scenarios except GBP/USD, which is located in the consolidation. So that we should watch for good entry points and trade actively.
The bottom line: the situation of the market is pretty good right now, we have a plenty of great scenarios for trading. EUR/USD, USD/CAD, AUD/USD and gold are in priority.