The Euro fell and broke down the previous level of support yesterday, but the movement was on the small volume, so now we should consider short positions. Moreover, given the recent strong growth on the large volume, we still must give advantage to purchases.
Long positions can be opened after a stoppage of the correction and a resumption of the sharp rise on the large volume, which will be a more secure and accurate signal for entering the market. A stop loss should be located below the beginning of the abrupt move up. The first target is the resistance 1.2411 – 1.2426.
The Pound also showed an abrupt drop yesterday. At the moment the price is located just above the support level of 1.4057. We should point out that the decrease was on the large volume, but while the price has not broken down the support, it is necessary to give advantage to long positions with this currency pair.
We can enter the market after a resumption of the price growth and a breakout of the local maximum, from which the sharp drop began. A stop loss should be located a little bit below the breakout bar. The potential of the deal is more than 130 points.
Our previous scenario was totally executed as the price dropped and broke down the previous support level, which is an excellent bearish signal. We also must highlight the new resistance level of 105.69, in which the increased volume is concentrated.
Therefore, it is worth regarding exceptionally short positions with the Yen. Sales can be opened after a smooth correction of the price upwards to obtain a better entry point. A stop loss should be placed a little above the resistance. The potential of the deal is more than 100 points.
Nothing has changed with the Canadian dollar as the pair is still trading within the local range between the support level of 1.2818 and the resistance of 1.3100. Thus, our previous scenario remains actual: new deals can be opened only after a sure exit of the price from the consolidation on the large volume, which will be an excellent signal for entering the market.
Until that, it is better to stay out of the market.
The Australian dollar dipped and completely absorbed the previous growth of the price. Nevertheless, the drop was on the small volume, so at the moment we cannot consider sales. Now the pair is located a bit above its support/local minimum of 0.7680, so we can identify 2 possible trading scenarios here. The first one is a breakdown of the support level on the large volume, which will allow us to open short positions. The second one is a test of the support level and a sharp rebound of the price up, which will allow us to consider the scenario of opening long positions.
So we need to wait for a sharp and strong reaction of the price on the level of support.
XAU/USD adjusted and tested the volume support level of 1323.10 – 1324.40, but failed to break it, after which it showed a rapid price increase. It should be noted that the upward movement was on the small volume, so we cannot allocate a new level or zone. Nevertheless, this is a good bullish signal, which allows us to consider the scenario of opening long positions.
Purchases can be opened after a smooth correction of the price down on the small volume to get an acceptable entry point. A stop loss should be located under the support level. The potential of the deal is more than 150 points.
The sentiment: the mood of the market affirms our scenarios with the Euro, Pound, Yen and gold, which is a good confirming signal for us. Thus, these instruments should in watch list today.