Daily Technical Forex Forecast 31.10.2017

EUR/USD

As expected, EUR/USD corrected upwards after the rapid price fall last week. The upward price movement was smooth and on small volume, which cannot be regarded as a market reversal or a bullish signal. Moreover, two levels of resistance remain at the top of the chart: the first is 1.1692-1.1705 and the second is 1.1740-1.1760. Both levels contain large volume, so they are excellent places to put stop losses above them.

Thus, given the sharp fall of the price last week and the presence of 2 strong resistance levels, it is necessary to give preference to short positions for this currency pair.

Sales should be opened after the resumption of the price fall, it is desirable if it is supported by increased/large volume, which would be a stronger signal. A stop loss should be placed above the level of 1.1705. The potential of the deal is more than 120 points.

GBP/USD

The situation for GBP/USD remained the same as the price is trading in the consolidation right now. The pair grew up yesterday, but this move was smooth and on small volume, so we can’t point out any fresh volume levels.

So that our previous scenario remains the same: we should wait for the exit of the price from the consolidation and only after that we can trade this currency pair. The movement should be sharp and supported by large volume, so it will be a more accurate signal for entering the market.

USD/JPY

The Yen continued correcting down and now is trading in the middle of its consolidation between two levels: the support 111.73 – 111.86 and the resistance 114.20. That’s why it is necessary to wait for the price to come out from this range and only after that we can consider new positions for this currency pair.

While the price is locked between these two levels, we should stay out of the market.

USD/CAD

After the correction on Friday, USD/CAD was trading in the local consolidation a little bit above the support level 1.2764 – 1.2777, where large volume is concentrated. Given the local uptrend and the presence of the strong support, we should consider long positions.

We can enter the market after a resumption of the growth of increased/large volume. A stop loss should be placed below the support. A potential of the deal is 130-140 points.

AUD/USD

The Australian dollar was trading in the little local consolidation the whole Monday, so our previous scenario remains the same: after a resumption of the fall on increased/large volume we can enter the market. A stop loss should be placed above the level 0.7720. A potential of the fall is around 80 pips.

XAU/USD

Gold continued its smooth growth yesterday, but overall the price is locked in the local consolidation between two strong levels. The first one is the support 1264.40 – 1266.00, the second – the resistance 1282.70 – 1284.60. Also we should note that large volume accumulation is located in this range.

That’s why the best decision will be just to wait for the exit of the price from this consolidation. The breakout move should be supported by large volume and be sharp, so it will be a stronger signal for entering the market.

Until that, it is better to skip this instrument from trading plan.

The sentiment: our scenarios for the Euro, Canadian and Australian dollars are confirmed which is a good additional signal to give preference to these currency pairs.

The bottom line: as usual Monday was the day of corrections and consolidations, so almost all our scenarios remain the same.

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