Daily Technical Forex Forecast 22.05.2018

EUR/USD

The Euro sank and broke down the previous support level, but failed to continue falling its decline and corrected upwards after the creation of the new support 1.1722. Nevertheless, the movement was on the small volume, so we cannot regard it as a reversal movement and open long positions.

Given the presence of the local downtrend, we still should give advantage to short positions with the Euro. We can enter the market after the resumption of the drop and a sure breakdown of the support level on the increased volume. A stop loss should be placed just above the breakout bar. The potential of the deal is more than 100 points.

GBP/USD

Our previous scenario was fully executed: the Pound continued its fall and broke down the previous support level, which is an excellent signal for opening short positions with this currency pair. Nevertheless, the movement was on the small volume, so we can not enter the market at the moment (the high probability of adjustment ).

We need to wait for a more reliable signal – the resumption of the sharp drop of the price on the large volume. A stop loss should be placed just above the beginning of the rapid movement of the pair down. The potential of the deal is more than 120 points.

USD/JPY

The pair also fell  down after a creation of the new resistance level of 111.36 yesterday. Nevertheless, the move was on the small volume, so we can’t identify it as a reversal signal. Moreover, given the local uptrend, we still should give advantage to long positions. We can enter the market after a confident and abrupt breakout of the resistance level. A stop loss must be located below the breakout bar. The potential of the deal is more than 100 points.

USD/CAD

The Canadian dollar is still located in the local range 1.2750 – 1.2985, but the pair demonstrated a keen fall yesterday and is trading near the lower boundary of this consolidation at the moment. Thus, we can regard a scenario of its breakdown, which will be an excellent signal for opening sales. The move should be abrupt and on the increased volume. A stop loss should be located just overhead the breakdown bar. The potential of the deal is more than 100 points.

AUD/USD

The price showed a sharp surge and is testing the resistance level/upper boundary of the range of 0.7581 now. Therefore, we can regard a scenario of its breakdown, which will be an excellent bullish signal and will allow us to open long positions. The breakout movement should be keen and supported by the increased volume, which will be a more reliable signal for entering the market.  A stop loss should be placed under the breakout bar. The potential of the deal is 80-90 points.

XAU/USD

XAU/USD broke down the previous support level, but the further fall was stopped by the creation of the new support 1282.80, after which the price corrected upwards. Given the fact that the price has grown on the small volume, as well as the presence of a strong resistance level of 1301.60 – 1303.50, we still should give advantage to short positions with gold.

We can enter the market and open sales after a confident breakdown of the support level on the increased volume, which will be a great bearish signal. A stop loss should be located just above the breakdown bar. The potential of the deal is more than 150 points.

The sentiment: the mood of the market acknowledges our scenarios with the Euro, Pound, Yen and gold. With the Canadian dollar, the situation is 50/50, and with the Australian – we still need to give preference to sales (according to the sentiment of the market). Thus, we should be extremely cautious trading these pairs.

Hits: 1