Weekly Technical Forex Forecast 01.05-05.05

EUR/USD

The euro broke out the previous level of resistance but failed to continue growing up. Also we need to highlight the new resistance that pushed the price down. It’s 1.0934 – 1.0943. Pretty large volume is concentrated in it + it’s a local maximum.

As can be seen from the chart, the pair is trading in the consolidation that contains huge volume. We can guess that big players gain positions there, so after the breakout of the boundaries of the consolidation local trend will start.

Given the strong uptrend, long positions are in priority. We can enter the market after the sharp breakout of the resistance on increased volume with a further fixation of the price above it. A stop loss should be placed below the breakout volumetric bar. The target is 1.1000.

If the price falls down sharply and breaks the lower boundary of the consolidation, out scenario will be cancelled and we can consider opening short positions.

GBP/USD

An upward trend for the pound continues, but the price grows smoothly so it is difficult to highlight any new volumetric levels or zones. So that we do not have a good place for putting a stop loss.

Also we need to note that the accumulation of volume that was in the consolidation acts as a support now, so until it is broken down, we should consider only long positions.

Purchases can be opened after a creation of the new volumetric level or the strong bullish impulse. Both scenario will give us a good place for a stop loss. The target is 1.3000.

USD/JPY

For the yen we need to point out the new level of resistance 111.56 – 111.70 which contains pretty large volume and stopped the growth of the price. Besides it this level is an upper boundary of the consolidation in which the price is trading now.

As we can see from the volumetric chart, really huge volume is concentrated in this range, so until its breakout we should stay out of the market. Of course, given the strong uptrend, long positions should be in priority.

We can buy USD/JPY only after the confident and abrupt breakout of the resistance on large volume. A stop loss should be set below the breakout bar. A potential of the deal is around 120-130 pips.

USD/CAD

For the Canadian dollar we should highlight the resistance level 1.3668 – 1.3690, which contains fairly large volume that stopped the price growth. Nevertheless, we have a strong uptrend for USD/CAD + the price of oil is falling, which has a negative effect on the Canadian dollar.

Thus, it is worth considering long positions as a prior scenario. We can open purchases only after the breakdown of the resistance level on large volume with a stop loss set just below the volumetric breakout bar. The potential of the deal is about 100 points.

AUD/USD

It is necessary to note the new level of support for AUD/USD, which is also a local minimum – 0.7441 – 0.7450. In this level, fairly large volume is concentrated. Also it is necessary to single out a test of this level and a sharp rebound of the price on a considerable volume.

Nevertheless, trading against the trend is not the most reasonable idea, so we should consider the scenario of opening sales after the breakdown of the level of support. This movement should be sharp and on increased volume. A stop loss should be placed just above the breakdown bar. The potential of the fall is around 80-90 points.

XAU/USD

The situation for gold is pretty complicated, because the price is trading in the consolidation near its level of resistance 1266.20 – 1269.00. This range contains huge volume, so there is a high possibility that after its breakout the local trend will begin.

In such situation we cannot trade until the price exits its consolidation. So that we can highlight 2 possible scenarios for trading gold:

1. If the price breakout the resistance 1266.20 – 1269.00 on large volume and continues its growth, we can open long positions with a stop loss set below the breakout volumetric bar. The target is 1283.00
2. If the price rebounds from the level, starts falling and breakout the lower boundary of the consolidation, we should open short positions. A stop loss must be set above the level from which the breakout move will begin. A potential of the deal is about 150 pips.

The sentiment: all our deals and scenarios are confirmed by the mood of the market. The sentiment shows that long positions for gold should be in priority, but the total situation for this instrument is unclear.

The bottom line: GBP/USD has the best situation for trading right now. For all other instruments we need to see additional signals or breakouts of consolidations/levels.

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