EUR/USD continues trading near the resistance level/upper limit of the global consolidation. It is necessary to correct this level, now it is the level of 1.1673, which was tested by the price yesterday. In addition, it is necessary to highlight the presence of large volume accumulation in this consolidation, which gives us reason to believe that large players are gaining positions in it. Thus, the best scenario will be to wait for a breakdown of this range and only after that it will be possible to consider new deals on this instrument.
Given that the price is exactly below the resistance level/upper boundary of the consolidation and did not show any reaction after its test, it is worth considering the breakout of this mark as the most likely scenario. If the price drastically breaks the level and movement is supported by large volume, then this will be an excellent signal for purchases. In this case, a stop loss should be placed below the breakout volume bar. The deal’s potential is more than 150 points.
Nothing has changed for this currency pair as GBP/USD tested the lower boundary of the global range but failed to break it out. Now the price continues trading in the range, so our previous scenario remains the same – only after the sharp and sure breakout of the consolidation we can consider new deals.
The Yen has tested the support level 113.11 – 113.26 but then rebounded back and now it is located in the middle of its local consolidation. Given this fact, we may consider new deals for this instrument only after the price comes from the range. The move must be sharp and supported by large volume, which will be a more accurate signal for entering the market.
The price grew up yesterday, but the move was smooth and on small volume, so we can’t regard it as a strong bullish movement or reversal signal. On the other hand, it is impossible to point out any volume level at the moment. So the best decision will be staying out of the market and waiting for the appearance of large volume and creation of new levels, which can be used in trading.
The Australian dollar broke down the support level 0.7634 but could not fix below it and is trading at this level right now. Even despite this fact, this is a signal for considering short positions, but we need to get an additional signal. Such a signal is a resumption of the fall of the price on increased volume. A stop loss should be placed above the beginning of the move. A potential of the deal is around 100 pips.
Unfortunately, gold did not show any significant move on Monday and the price remained trading in the middle of the global consolidation between two strong volume levels: the support 1264.40 – 1266.00 and the resistance 1287.70. We should note the presence of large volume accumulation in this range, so we must wait for the price to come out from it. It will be a good signal for entering the market.
Until that it is better to stay out of the market.
The sentiment: this indicator confirms our scenarios for the Euro and the Australian dollar. For all other pairs it does not play a big role as they are located in consolidations.
The bottom line: the situation on the market continues to be very difficult for trading, but anyway there are a couple interesting scenarios (EUR/USD, AUD/USD) which we can watch for.