The euro broke down the lower boundary of the consolidation on large volume after the ECB press-conference on Thursday. The new level of resistance was created, it’s 1.1217 – 1.1231, that contains large volume. On Friday the price showed an upward correction, but this move was on small volume, so it does not play a big role.
Given all these facts we should consider short positions as a priority scenario. We can enter the market after a small and smooth correction of the price to the resistance. A stop loss should be placed at 1.1238. The target is 1.1120, sot the risk/profit ration is, at least, 1 to 2.
The pound opened with a strong gap down after the publishing results of the parliamentary elections in the UK. The price broke the all support levels and is trading below the previous consolidation now. Also we need to highlight the new level of support which was created after the gap. It is 1.2698 – 1.2710. Large volume is concentrated in this mark.
So if the price breaks down this level the road down will be opened. The move should be on increased volume and abrupt. A stop loss must be placed above the volume breakout bar. A potential of the fall is around 100 pips.
It seems like the downtrend for the yen is over as the price grew up strongly last week. Also we need to highlight the fresh level of resistance 110.65 – 110.80. It contains large volume and the price showed the correction after its creation. We should note that this correction was on small volume, so it does not play a big role.
The scenario of trading the yen is next: we need to wait for a strong breakout of the resistance on large volume with further fixation of the price above it. After that we can open long positions with a stop loss set below the breakout volume bar. The first target is 111.60, the second one – 112.00.
Excellent data on the labor market in Canada put a pressure on the pair USD/CAD, as a result, the price showed a strong fall. It is worth noting the level of support 1.3427. This mark is also the lower limit of consolidation.
Therefore, if the price breaks this level and continues its fall, we can consider the option of opening short positions. A stop loss should be placed just above the breakdown volume bar. The potential of the fall is about 100 points.
It is also worthwhile to watch the oil, because it is in the consolidation now and, if the price breaks down the consolidation, we should cancel our scenario for USD/CAD.
The Australian dollar is trading in the local consolidation just below the resistance level 0.7563. Very large volume is concentrated in this range, therefore, despite the upward trend, it is possible to open long positions only after the breakdown of the resistance.
The breakdown must be sharp and on increased volume, after which it is possible to open purchases. A stop loss should be put under the breakout volume bar. The potential of the growth is about 60 points.
Despite the possible scenario, the deal is rather risky due to the general situation on the market. If the price begins to fall sharply, it is worth considering short positions.
There is a local downtrend for gold. The fall of the price was supported by pretty large volume, so now we should consider opening short positions. Moreover, all previous support levels were broken down.
Also we need to highlight the fresh level of support 1265.20 – 1267.70 that stopped the fall of the price on Friday. Besides it, this level contains quite large volume, but the instrument failed to rebound strongly from it. So we should trade its breakdown.
The scenario for trading gold is simple: after the strong breakdown of the resistance we open short positions with a stop loss set above the breakout volume bar. The target is 1250.00.
The bottom line: the best instruments for trading are the yen and gold. The euro and the pound also have potentially good situations for trading.