On Tuesday, EUR/USD confidently broke through the resistance level/upper boundary of the consolidation 1.1424 and fixed above it. Given that large volume is concentrated in this range, such a move means a continuation of the global uptrend for the euro.
It is also worth noting that the movement was on average volume, as a result, we can not point out some new volume levels from which we can use in trading.
Therefore it is necessary to consider only purchases for this pair now. We can open long positions after a small and smooth correction of the price down. It is important that this movement will be on small volume. A stop loss should be placed below the level of 1.1380. The growth potential is 90-100 points.
After the test of the resistance 1.2904 – 1.2915 the pound fell down sharply and on increased volume. Such strong rebound of the price is a good sign of strength of the level, so it is a good place for placing a stop loss.
So now we need to highlight a scenario of opening of short positions: after the small correction of the price upwards, we enter the market. A stop loss should be placed above the level 1.2927. A potential of the fall is 130 pips.
USD/JPY showed a strong and abrupt fall of the price on increased volume and has broken down the previous level of support. So the continuation of the uptrend is under the question and I advise you to stay out of the market until the stoppage of the downward correction, because it is way too risky to trade against such a strong trend.
USD/CAD is still trading in the consolidation in the level of resistance 1.2893 – 1.2915, which contains really large volume. Given the strong downtrend, we should consider short positions, but only after the confirming signal. Such a signal will be a resumption of the fall on large volume. A stop loss should be placed above the level 1.2945. A potential of the fall is more than 100 pips.
If the price continues growing, it is better to stay out of the market and don’t trade against such a strong trend.
There will be a a lot of important news for the Canadian dollar today, so be careful trading this currency.
The Australian dollar, at last, broke out the upper boundary of the consolidation and grew up. The move was confident and supported by increased volume. Also we can point out the new support level 0.7607 – 0.7614, that contains pretty large volume and from which the price started its growth.
So now we can consider opening long positions after a smooth downward correction. A stop loss should be placed below the support. The target is the local maximum 0.7705.
Gold grew up strongly and broke out the level of resistance. The move was supported by increased volume, so our scenario of opening of short positions are under the question. Anyway, it is too early to consider purchases too. Also we need to point out the resistance level 1224.00, from which a strong bearish momentum began.
This level is a cornerstone for trading gold and we should highlight 2 possible scenarios of trading from it:
The sentiment: our scenarios for the euro and the Australian dollar are confirmed. For gold and the Canadian dollar short positions should be in priority, but situations are tough there. For the yen the situation is 50/50. For the pound our scenario is not confirmed, so I advise you to be very careful with this currency pair.
The bottom line: EUR/USD and AUD/USD are in priority today. Watch for the Canadian dollar and gold.