The Euro is still trading in the local consolidation below the level of resistance 1.1692 – 1.1705. Also we need to point out the second resistance 1.1740 – 1.1760. Both levels contain large volume, so until their breakouts, we should give preference to short positions.
We can enter the market after a test of the resistance and a resumption of the fall of the price on increased/large volume. It will be a more accurate and stronger signal for opening short positions. A stop loss should be placed above the resistance. A potential of the deal is 110-120 points.
After the interest rate increase in the UK, GBP/USD showed a significant fall and lost more than 200 points. It is worth noting that the price move was on very significant volume, which is a strong bearish signal.
In addition, it is necessary to allocate a new level of resistance 1.3097 – 1.3139, which was formed during this movement. In this level, very large volume is concentrated, which only strengthens its importance.
Given all of the above factors, it is worth giving preference to short positions for this currency pair.
Sales should be opened after the price fall resumed, preferably after a small upward correction, in order to obtain a more profitable entry point. A stop loss should be placed a little above the resistance. The potential of the deal is more than 150 points.
The Yen is still trading near the level of resistance/upper limit of the consolidation 114.20, where large volume is concentrated. The price tried to fall yesterday, but the move was totally absorbed, so we still should consider the scenario of the breakout of the resistance and opening long positions. The move should be sharp and supported by increased volume. A stop loss should be placed below the breakout volume bar. A potential of the deal is more than 110 points.
USD/CAD is locked in the consolidation between two strong levels: the support 1.2764 – 1.2777 and the resistance 1.2911. Large volume is concentrated in this range, so that the best decision will be waiting for the price to come out from the consolidation. Only after that we may consider new deals.
After the test of the level of resistance/upper limit of the consolidation the price rebounded down and is trading in the middle of the consolidation at the moment. That’s why our previous scenario remains actual: we can enter the market only after an exit of the pair from the range. The move should be sharp and supported by large volume. Until that it is better to stay out of the market.
Gold tested the level of resistance/upper limit of the consolidation, but failed to break it out and returned trading back into the consolidation. Pretty large volume is concentrated in this consolidation, so that it is better to wait for the price to come out from it. After that we may consider new positions for gold.
We should note that the breakout move must be sharp and supported by large volume, in order to avoid any fake movements or breakouts. Moreover, it will be a stronger signal for entering the market.
While the price is located in the range, we should stay out of the market.
The sentiment: this indicator confirms our scenario for the Yen, while for the Euro and the Pound it shows equal value. For all other instruments it does not matter as they are trading in ranges.
The bottom line: today non-farm payrolls will be released, so be careful and trade only after its release. The Pound and Yen are in priority.