Daily Technical Forex Forecast 04.08.2017
EUR/USD
The Euro continued growing but the move was supported by small volume, so we were unable to open long positions. Anyway it is a good sign for the further upward move and a continuation of the global uptrend for EUR/USD.
So our previous scenario remains the same – we need to wait for the strong bullish momentum to get a good place for a stop loss. The move can start either from the current level or after a smooth downward correction of the price. It is very likely that we will see such a move after the release of the payrolls today. A stop loss should be placed below the beginning of such a sharp growth. A potential of the deal is around 90-100 pips.
GBP/USD
After the BOE meeting on Thursday, GBP/USD showed a strong bearish momentum and broke down the previous level of support. The move was supported by incredibly large volume and the new resistance level was created. It is 1.3144 – 1.3168, which also contains large volume.
On the other hand, the uptrend for the pound is still relevant, so we need to see a continuation of the fall on large volume as a confirmation that this is a reversal signal. Given that payrolls will be released today, we should wait for the reaction of the price on this news and only after that we will be able to build any scenario. Until that it is better to stay out of the market.
USD/JPY
The Yen has tested the level of support 109.97 – 110.20 and is trading inside this level. The price did not show a strong rebound of the price, so it is a good sign for the breakdown of this mark.
If the price breaks down the support on large volume and continues falling, we can enter the market and open short positions. A stop loss should be placed above 110.36. A potential of the deal is 110-120 points.
USD/CAD
The situation for the Canadian dollar remains the same as the price continued its smooth growth, but volume was decreasing during this move. Given the strong downtrend, we can see that long positions are not the best option.
We need to wait for the appearance of large volume and strong impulse to be able to trade this currency pair. Very possible that we will see such a move today, because there are a lot of economic events. Until that it is better to stay out of the market.
AUD/USD
The price is still trading in the global consolidation, so the scenario is still the same – stay out of the market until the beginning of the new trend or strong and an appearance of sharp and strong momentum, so we will have a good place for a stop loss.
XAU/USD
After a false breakdown of the support level, XAU/USD resumed its growth and is trading in the consolidation again now. It is worth noting that the price fall, though it was sharp, did not contain large volume, while the price growth was both rapid and on increased volume.
It is also necessary to highlight the resistance level/upper limit of consolidation 1273.30, in which large volume is concentrated. The upward trend for gold is also remains relevant, so despite trading in the local consolidation, long positions look more interesting.
We can open long positions only after a confident and sharp breakdown of resistance 1273.30 on large volume with further fixation of the price above it. A stop loss should be placed just below the beginning of the breakout movement. The potential of the deal is about 150 points.
The sentiment: our scenarios for the euro and the yen are confirmed. The mood of the market for gold is balanced, but all technical factors points the advantage of long positions. Despite the strong fall of the price, the sentiment shows that we should give preference to long positions for the pound.
The bottom line: the payrolls are in focus today! Be careful trading currency pairs that contain USD dollar. Before the news it is better to close all positions and watch for impulses and new volume levels after the release of the labor market data.
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