Weekly Technical Forex Forecast 17-21.12.2018


EUR/USD

The Euro showed a sharp decline and is now trading near the support/lower limit of the local consolidation 1.1267. The downward movement was supported by the increased volume, which is an excellent bearish signal. Thus, we can consider a scenario of the breakdown of the support that will allow us to open sales.

The breakdown movement must be confident, rapid and on the large volume, which will be a more reliable signal to enter the market. A stop loss should be placed slightly above the breakout volume bar. The potential of the deal is more than 100 points.

GBP/USD

The Pound also showed a rapid decline on Friday, but the movement was on the small volume, so we cannot single out any new volume level. Nevertheless, given this decline and the presence of a strong downtrend, we should give preference to short positions.

Sales can be opened after the continuation of the downward movement, but the fall should be supported by the large volume, which will be a more accurate signal to enter the market. A stop loss should be placed just above the beginning of this fall. The potential of the deal is more than 100 points.

USD/JPY

The Yen continues trading near the resistance/upper limit of the local range 113.62 – 113.75. Thus, our previous scenario remains relevant: we can open purchases only after a sharp breakout of this mark. Moreover, the movement must be supported by the large volume, which will insure us against a false breakout.  A stop loss should be placed slightly below the breakout volume bar. The potential of the deal is about 80 points.

USD/CAD

Nothing has changed with the Canadian dollar, as the price is still trading within the local range. The boundaies of the consolidation are the support 1.3270 and resistance 1.3429. Thus, we can consider new trading scenarios only after a confident and abrupt breakout of one of these levels and the exit of the price from the range. Moreover, the movement should be supported by the large volume, which will be a more accurate signal to enter the market.

AUD/USD

The Australian dollar broke down the previous support level, but further movement was stopped by the new volume level 0.7152. Thus, we can consider short positions only after the rapid breakdown of this mark. The downward movement should be on the large volume, which will insure us against a fake breakdown and will be a stronger signal to enter the market. A stop loss should be placed slightly above the breakout volume bar. The potential of the deal is more than 80 points.

XAU/USD

Gold showed a sharp increase after the formation of the new level of support 1234.30 on Friday. The large volume is concentrated in this mark. Also we should consider a presence of the local uptrend. Given all these factors, we should give a slight preference for long positions.

Purchases can be opened after continued growth of the price, but the movement should be supported by the large volume, which will be a more accurate signal to enter. A stop loss should be placed just below the support level. The potential of the deal is about 130 points.

The sentiment: the market sentiment confirms all our trading scenarios except gold, according to which the situation is 50/50. Thus, we need to be extremely careful with this instrument. As with the Canadian dollar, new deals can be opened only after a confident exit of the pair from the consolidation.