After the strong growth of the price on Friday, the Euro showed a quite sharp downward correction on Monday, but this fall was on very small volume, so we can’t point out any new level or zone. Overall, the situation wasn’t changed as the price is trading in the global consolidation, where large volume is concentrated.
So that we will be able to trade this currency pair only after a strong and sure exit of the price from this range. Until that we can’t and shouldn’t enter the market.
After the rebound of the price from the support level on Friday, GBP/USD resumed the fall, absorbed the previous upward movement and is currently trading at 1.2959. The overall picture remains the same – the pair is trading in the local consolidation, where large accumulation of volume is concentrated. Thus, the previous scenario of opening short positions after the breakdown of the level of support remains relevant.
The breakdown move should be sharp and on large volume to avoid false breakdown. After the fixation of the price below the level 1.2959 or a continuation of the rapid fall, we can open short positions. A stop loss should be placed just above the breakdown volume bar. The potential of the deal is about 120 points.
The Yen continued the growth started on Friday and now is trading between two volume levels 108.80 and 110.92. Yes, the price has broken out the previous resistance, but the move was smooth and on really small volume. Overall, the entire growth was on small volume, so it is risky to trade this movement. We need to wait for the breakout of one of this global levels and only after that we can trade USD/JPY.
If the price remains trading in this range, we should stay out of the market.
The pair is still trading in the local consolidation 1.2656 – 1.2747. Now the price is located near the higher boundary of the consolidation. Large volume is concentrated in this range, so the confident exit of the price from this range will be a great signal for trading. So we should consider 2 scenarios: short positions after the breakdown of the 1.2656 and long positions after the breakout of the 1.2747. A stop loss should be placed above/below the breakout volume bar. A potential of the fall is around 100 pips; for the growth – more than 120 pips.
After the test of the resistance, the price rebounded down and now is trading in the local consolidation near the local minimum. Pretty large volume is concentrated in this range, so it is advisable to enter the market only after the strong breakout of the boundaries of this range. The move should be on large volume, stop loss should be placed above/below the breakout volume bar. A potential of the fall is 70 pips; of the growth – 60-70 pips.
Despite the sharp fall of the price on Monday, we can’t open short positions as the move was on really small volume + there is a strong uptrend for gold. On the other hand we can’t open long positions after such a strong fall.
That’s why we need to wait for the appearance of large volume on the market and watch for the reaction of the price. After that we can start considering any possible deals. Of course, due to the uptrend, long positions are in priority, but we need to get a confirming signal.
Until that we should stay out of the market.
The sentiment: almost all instruments are in equilibrium, because many of them are in consolidations. That’s why we need to wait for the exit of pairs from ranges and watch for changes of the mood of the market.
The bottom line: almost all currency pairs are trading in consolidations, so that we should be careful and enter the market after the sure exit of the price form them.