EUR/USD showed a rapid fall on Wednesday and lost more than 110 points. It should be noted that in spite of the fact that the move was on small volume, we can single out a new local resistance level 1.1910 – 1.1918, in which increased volume is concentrated.
Thus, we should not consider buying after such a drastic price fall. As for sales, in order to be able to open short positions, we need to see a stronger signal. For example, a test of the level and a strong rebound of the price down on large volume. In this case, we can sell the euro intraday, because there is still a global uptrend for this instrument . A stop loss should be placed above the resistance level. The potential of the deal is 80-90 points.
The Pound corrected down yesterday. The move was pretty abrupt, but on average volume, so we can’t consider it as a reversal signal. Moreover, there is a strong uptrend for this currency pair. So we still should give preference to long positions, but only after the resumption of the growth on really large volume. It will be a good signal for the continuation of the uptrend. If the price continues correcting, we should stay out of the market.
The local uptrend for the Yen continues as the price showed a confident growth on increased volume. But the price is still located under the global resistance/upper boundary of the range 110.92. So only its breakout we can consider long positions with a stop loss placed below the breakout bar. A potential of the deal is up to 120 pips.
The price is still in the consolidation, where large volume is concentrated, so we should consider any deal only after a sure exit of the price from the range. Given the global downtrend, we should give preference to short positions.
We can enter the market after an appearance of strong bearish impulse. A stop loss should be placed above the consolidation. A potential of the deal is more than 100 pips.
The situation for the Australian dollar is difficult as the price fell down, then grew up and all these were on small volume, so we can’t point out an new volume level or zone. Overall, the pair is in the local consolidation, so the best decision is to stay out of the market and wait for the appearance of large volume and a reaction of the price on it.
Despite an abrupt fall of the price, there is a strong uptrend for this instrument, so now we can’t consider short positions. Moreover, volume during the downward move was average, so we can’t point out any new volume levels. That’s why we should wait for appearance of large volume and creation of new levels which can be used in considering new deals for gold.
If the price continues trading on small volume, we should stay out of the market.
The sentiment: all our scenarios are confirmed. For AUD/USD the indicator is equal, for gold – long positions should be in priority.
The bottom line: the situation on the market is pretty tough for trading as many instruments shows corrections. That’s why we should be extremely careful.