The Euro showed a smooth fall of the price on the “thin” market and tested the level of support on Monday. Now the pair is trading near this mark. It is worth noting that both the test and the price drop were on the small volume, which makes the situation rather confusing. Thus, we should consider 2 scenarios of euro trading.
The first scenario: a continuation of the fall and the confident breakdown of the level of support on the large volume, after which we can open sales. A stop loss should be placed just above the breakdown volume bar. The Target of the deal is the level 1.2209.
The second scenario: a sharp price rebound from the support level up. The price growth should be supported by the increased/large volume. A stop loss should be placed under the support level. The target is 1.2520.
The price fell down yesterday, but the downward movement was smooth and supported by the small volume, so we still can’t consider short positions with the Pound. Moreover, we should take into account the recent sharp growth on the large volume, so long positions are still in priority.
We can enter the market after a stoppage of the correction and a resumption of the sharp growth supported by the large volume, which will be a great signal for opening purchases. A stop loss must be placed below the beginning of the abrupt move up. A potential of the deal is more than 150 points.
The Yen grew up, but the move was smooth and on the small volume, so we can’t regard long positions at the moment. Besides it, there is a strong downtrend with this instrument, so it is better to give preference to sales.
We can enter the market after a stoppage of the upward correction of the price and a resumption of the sharp fall supported by the large volume. A stop loss should be placed above the beginning of the movement. A potential of the deal is more than 120 points.
The situation here has not been changed as the price is still trading between two strong volume levels. The first one – the support 1.2454, the second – the resistance 1.2675. We can state that the pair is in the consolidation now. That’s why we should wait for a sure exit of the price from the range and only after that we can consider new deals here.
Until that, it is better to skip this instrument from our trading plan.
The Australian dollar is still locked in the local consolidation between the support 0.7770 and the resistance 0.7987 at the moment. That’s why our previous scenario with this instrument is still actual: we can regard new deals here only after a sharp and confident breakout of boundaries of the range. The breakout move must be supported by the large volume, which will be a more reliable signal for entering the market.
While the price is located in the consolidation, we should stay out of the market.
Gold fell down and broke down the previous support level yesterday. We should note that the breakdown movement was smooth and supported by the small volume, which is a weak signal for opening short positions. Moreover, there was a strong bullish impulse on the large volume, that’s why we still should give advantage to purchases here.
We can enter the market after a stoppage of the fall of the price and a resumption of the abrupt growth supported by the large volume, which will be a more reliable signal for opening long positions. A stop loss should be placed below the beginning of the upward movement. A potential of the deal is more than 150 points.
The sentiment: this indicator confirms our scenarios with the Pound, the Yen and gold. But despite this fact, we should wait for strong additional signals to be able to open new deals.