The Euro sharply adjusted down yesterday. The pair is trading in the middle of the local range between two strong levels now. They are the support 1.1517 and the resistance 1.1827. From the volume chart below we can see that the large volume accumulation is concentrated within this consolidation.
Therefore, the best decision is just to wait for a sure and keen exit of the price from the local consolidation, which will be an excellent signal for entering the market. The movement must be on the large volume, which will insure us against a fake breakout.
The Pound also fell down sharply and tested the strong support level of 1.3190 – 1.3204 yesterday, but failed to break it down. The pair is trading near this mark at the moment, which gives us the possibility to regard 2 trading scenarios.
The first: an abrupt rebound of the price up on the large volume after the test of the level of support, which will consent us to open long positions. A stop loss should be located under this mark. The potential of the deal is just over 100 points.
The second: a sharp breakdown of the support level on the large volume, which will be a strong bearish signal. A stop loss should be placed just above the breakdown volume bar. The potential of the deal is more than 150 points.
The price adjusted upwards yesterday and is inside the local range between the support 109.32 and the resistance 110.83 at the moment. Given that the large volume is concentrated inside this consolidation, the best decision is just to wait for a confident exit of the price from it. The movement must be supported by the large volume, which will be a more precise and secure signal for entering the market.
The Canadian dollar is also located within the local consolidation of 1.3270 – 1.3346, which contains the very large volume. Hence, we can open new positions only after a sure breakdown of one of the boundaries of the consolidation and the exit of the price from it. The movement should be sharp and on the large volume, which will insure us against a fake breakdown and will be a more reliable signal for entering the market.
The Australian dollar carried on its sink and is testing the support level 0.7360 once again. Considering the presence of a strong downtrend with this pair, we should regard a scenario of the breakdown of this level, which will be a good bearish signal. The breakout movement must be rapid and supported by the large volume, which will be a more accurate signal for opening sales. A stop loss must be located just above the breakdown volume bar. The potential of the deal is about 80 points.
Gold showed a significant fall of the price and broke down the previous support level/local minimum. This is a strong bearish signal and given the downtrend, we should consider only sales.
Nevertheless, we cannot open short positions at the moment, since the breakdown movement was on the small volume, so there is a possibility of correction upwards + there is no reliable place for a stop loss.
We can enter the market after a small correction and the resumption of the price drop, but the movement should be supported by the large volume, which will be a more accurate signal for entering the market. A stop loss should be placed a little above this decline. The potential of the deal is more than 150 points.
The sentiment: the mood of the market totally affirms our trading scenarios with the Australian dollar and gold. We should give preference to long positions with the Canadian dollar, which is confirmed by the uptrend, but it is necessary to wait for the breakdown of the resistance. With all other pairs, we need wait for exit of the prices from ranges or to react to strong levels.