After a strong growth of the price the euro corrected to the level of support 1.1106 – 1.1114 and tested it. The pair is trading inside this level now, so our previous scenario is still alive, but we need to get an additional signal that bulls are still dominating the market.
Such a signal will be a sharp growth of the price above the level 1.1140 and an absorption of yesterday’s downward move. It will be a good signal for opening long positions with a stop loss set below the level 1.1100. Also an upward movement should be on large volume. A potential of the growth is around 90 pips.
The pound showed a really strong growth of the price and broke out he level of resistance and the higher boundary of the consolidation, but in the evening the price fell down sharply and returned back into the range.
Due to the presence of 2 strong opposite moves and trading in the consolidation, it’s hard to predict the further move of the pair. That’s why I advise you to stay out of the market for the pound for today.
The pair USD/JPY could not continue falling, which began on Wednesday and corrected to its fresh resistance level 111.70 – 111.90, in which very large volume is concentrated. The correction of the price was on increased volume, but still not so large in comparison with the fall in the middle of the week.
It is also important to note that the price increase was rather sharp, therefore it is only necessary to resume sales after an additional confirmation signal.
Such a signal will be a strong and sharp rebound of the price from the resistance level on very large volume. After occurrence of such movement, we wait for a small smooth correction of the price upwards and open short positions. A stop loss should be placed above the resistance level 111.70 – 111.90. The first goal is a local minimum, after which it is necessary to remove the stop loss in the break even. The total potential of the deal is about 120-130 points.
The Canadian dollar is trading in the local consolidation near its level of support 1.3579. So our previous scenario remains actual – we can open short positions for USD/CAD only after the breakout of this level. The breakout move should be on increased volume. A stop loss should be placed above the breakout volumetric bar. A potential of the fall is around 100 pips.
AUD/USD also could not continue growing and returned trading back into the consolidation. it is necessary to highlight the new level of resistance 0.7736 – 0.7741. It contains pretty large volume + the price fell down from this level.
So we need to wait for the price to break it out and then we will be able to open long positions for the Australian dollar. A stop loss should be placed below the breakout bar. A potential of the growth is around 70 pips.
As for sales, we can open short positions only after the fall of the price below the level 0.7350.
Gold has broken down the level of support on pretty large volume, so that our previous scenario is cancelled. Of course, due to the local uptrend, long positions should be in priority, but the fall of the price was strong and it totally absorbed previous growth.
So now there is no a good situation for trading gold and I advise you to skip this instrument from your trading plan for today.
The sentiment: our deals for the euro and the yen are confirmed, for the pound and the Canadian dollar long positions should be in priority. The situation for the gold is near 50/50, that’s why it’s better not to trade it. The sentiment for the Australian dollar does not confirm our scenario, so we should be careful trading this pair.
The bottom line: the yen deal is in priority, also watching for the euro. All other instruments have pretty complicated situations for trading.