Weekly Technical Forex Forecast 08-12.05

EUR/USD

The cornerstone in trading the euro is the second round of the French presidential election and the reaction of the price after the release of the results. So that it is almost impossible to predict the move of this pair.

If we look at the technical part of the analysis, we need to point of the strong support 1.0934 – 1.0943 which contains large volume. It is necessary to highlight the growth of EUR/USD after the release of good data for the payrolls: the price tested the level and rebounded up.

In such situation long positions should be in priority, but with the election we can only guess the further behavior. The best situation for us will be another one test (or correction) of the support 1.0934 – 1.0943 and resumption of the growth on large volume. It will be a good moment for opening long positions. A stop loss should be placed below the level. The target – 1.1050.

GBP/USD

The situation for the pound is rather difficult now. Yes, the price continued growing, but it was on small volume, so we can’t highlight any new level or zones. Besides it, there is a high possibility of downward correction now. Moreover, the pound also can be affected by the French presidential elections.

Given all these facts I advise to stay out of the market for this instrument and wait for the clarification of the situation.

USD/JPY

USD/JPY continue trading above the level of support 112.24 – 112.31. This level contains huge volume + it was tested last week and kept the price above itself. These facts only strengthen the meaning of this zone, so we should consider opening long positions until the breakout of the level.

A presence of the strong uptrend also confirms our scenario.

We can enter the market after the breakout of the local maximum on large volume and a continuation of the growth. A stop loss should be set below the breakout volumetric bar. A potential of the deal is around 80-90 pips.

USD/CAD

The rapid growth of the oil price led to the strengthening of the Canadian dollar and the fall of the pair USD/CAD. It should be noted that this move was sharp and on large volume, so it is not worthwhile to consider long positions now.

As for sales, trading against the trend is not a good scenario. Therefore, for the pair USD/CAD it is still better to be out of the market.

AUD/USD

After the release of the payrolls, the pair AUD/USD rose on large volume. In addition, if you look at the voluminous graph below, you can see a large volume near the local minimum.

All these factors do not make it possible to open short positions from the current level. Therefore, we need to wait for the breakdown of this accumulation of the volume (minimum), after which it is possible to reopen sales. A stop loss should be placed just above the breakdown volumetric bar. The potential of the fall is about 60-70 points.

XAU/USD

After the release of the payroll XAU/USD tested the level of support 1226.00 – 1229.10 one more time, but failed to break it down. Also we need to highlight the presence of the strong accumulation of volume in this level.

But we can’t open long positions form this level now, because there is a strong downtrend. So that we still should regard short positions as the main scenario.

We can enter the market only after the breakdown of the support on really large volume with a further fixation of the price below it. A stop loss should be placed above the breakout volumetric bar. A potential of the fall is around 120-130 pips.

The sentiment: the mood of the market confirms our deals for the euro, yen, Australian dollar and gold. For the pound and Canadian dollar long positions should be in priority, but situations for these instrument are unclear.

The bottom line: gold has the best situation for trading right now. USD/JPY and AUD/USD are also pretty interesting instruments. For the euro and the pound, it is better to wait for the final results of the French presidential election.

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